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January 1, 2010

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Home » Business » Finance

Firms eye to raise US$131b from market

DOMESTIC companies are lining up to raise an estimated 900 billion yuan (US$131 billion) in funding from the A-share market in 2010, according to an industry report.

The China Securities Regulatory Commission has approved 79.7 billion yuan worth of initial public offerings, additional share sales and share placement this year, said Everbright Securities Co in a report.

About 600 companies are lining up to apply for IPOs to raise an estimated 300 billion yuan, and the brokerage expected that the Agricultural Bank of China and China Everbright Bank are very likely to join them this year to raise a combined 100 billion yuan.

A combined 202.2 billion yuan were raised by 111 companies in IPOs last year after the securities regulator resumed new share sales in June.

Among the 111 companies, 42 launched IPOs on ChiNext, China's Nasdaq-style board, 10 on the Shanghai Stock Exchange, and the rest were listed on the Shenzhen main board.

The 10 heavyweights in Shanghai raised a combined 131.8 billion yuan, accounting for 65 percent of the total funds raised in IPOs, and ChiNext firms raised 24.7 billion yuan.

The brokerage said some firms have been approved by their shareholders or director boards to issue extra shares or for share placements to raise 323.7 billion yuan this year.

Domestic banks also hope to raise 100 billion yuan from the market.

"We estimated only 500 billion yuan will (actually) be financed from the stock market this year on concerns of liquidity and the approval pace by the regulator," Everbright said, adding some of the planned share sales may not be approved by the regulator.


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