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GEM float falls short of estimates

THE first 10 companies to float on China's upcoming Nasdaq-style board froze a combined 784.1 billion yuan in subscriptions, less than the market estimate of 1 trillion yuan.

Their stocks were 128 times oversubscribed, much lower than the average 435 times for the 24 companies that have launched initial public offerings this year.

"Some stocks reported a lower lot winning rate in the offline portion for institutional investors than that of the online portion, indicating that individual investors felt wary of higher risks in the new board and lacked confidence in the stock market when the main boards kept declining," said Founder Securities Co.

The size of combined frozen funds was less than some heavyweight stocks, such as China State Construction Engineering Co Ltd and Metallurgical Corp of China, each of which froze more than 1 trillion yuan in subscriptions.

The country plans to launch the Growth Enterprise Market in Shenzhen as early as next month in a bid to diversify financing channels for small and medium companies that face difficulties getting loans from banks.


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