IPOs set for a small decline in 2011: PwC
By Lydia Chen |
July 5, 2011, Tuesday
|
Print Edition
Print Edition
NEW listings and funds raised on Chinese mainland markets are forecast to drop slightly in 2011 compared with last year, global financial consultancy PricewaterhouseCoopers said yesterday.
Although the total capital raised through Chinese initial public offerings are projected to slow to 400 billion yuan (US$61.82 billion) this year, compared with 476.5 billion last year, this figure remains the highest globally, the consultancy said.
The slight decline will be accompanied with a small decrease in the number of new listings to 320 companies this year from the 349 listings a year ago - also the highest globally.
Despite the expected slowdown, the average price-to-earnings ratios of new IPOs in the mainland will remain between 40 to 60 times, Frank Lyn, PwC China Markets leader, said.
The firm predicted that the mainland's leading IPO market this year will be industrial products, information technology, financial services as well as retail, consumer goods and services.
Meanwhile, in the first half of this year, a total of 168 firms went public in the mainland A-share market, nine companies fewer from the same period last year, PwC said.
The new listings raised a combined 176.3 billion yuan from January to June, an 18 percent decrease from same period a year ago.
Among the new listings, 121 companies saw their P/E ratios jump above 40 times with 22 of surpassing a P/E ratio of 80 times, PwC said in the report.
These high P/E levels are considered one of the main factors causing companies' share prices to fall below their IPO prices.
In the first six months of this year, 37.5 percent of new listings saw their prices tumbling below IPO levels.
Although the total capital raised through Chinese initial public offerings are projected to slow to 400 billion yuan (US$61.82 billion) this year, compared with 476.5 billion last year, this figure remains the highest globally, the consultancy said.
The slight decline will be accompanied with a small decrease in the number of new listings to 320 companies this year from the 349 listings a year ago - also the highest globally.
Despite the expected slowdown, the average price-to-earnings ratios of new IPOs in the mainland will remain between 40 to 60 times, Frank Lyn, PwC China Markets leader, said.
The firm predicted that the mainland's leading IPO market this year will be industrial products, information technology, financial services as well as retail, consumer goods and services.
Meanwhile, in the first half of this year, a total of 168 firms went public in the mainland A-share market, nine companies fewer from the same period last year, PwC said.
The new listings raised a combined 176.3 billion yuan from January to June, an 18 percent decrease from same period a year ago.
Among the new listings, 121 companies saw their P/E ratios jump above 40 times with 22 of surpassing a P/E ratio of 80 times, PwC said in the report.
These high P/E levels are considered one of the main factors causing companies' share prices to fall below their IPO prices.
In the first six months of this year, 37.5 percent of new listings saw their prices tumbling below IPO levels.
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