Shares fall on IPO wave, correction fear
Print Edition
SHANGHAI shares tumbled yesterday as Guotai Junan Securities Co launched the Chinese mainland’s biggest initial public offering since 2010 and concerns about a market correction also cast a cloud over investor sentiment.
The Shanghai Composite Index fell 3.7 percent to 4,785.36 points.
The gauge lost 7.4 percent this week, heading for its steepest weekly loss since February 2009.
Subscriptions for 25 IPOs including Guotai Junan may freeze nearly 7.1 trillion yuan (US$1.1 trillion) of liquidity — the biggest funds lockup since January 2014, according to China International Capital Co and Guotai Junan. Some companies launched their IPOs on Wednesday.
Guotai Junan offered 1.53 billion shares at 19.71 yuan each to raise US$4.8 billion.
“The mega listing of Guotai Junan and the upcoming Bank of Jiangsu will siphon funds” from existing stocks, said Guo Feng, vice general manager of Northeast Securities’ Wealth Management Department.
Consumer companies fell, with liquor maker Kweichow Moutai Co down 4.36 percent to 243.97 yuan.
Analysts have cautioned the stock market may start to correct as the Shanghai Composite has more than doubled in the past 12 months to its highest levels in seven years.
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