Stocks dip ahead of 1st listings since Feb
Print Edition
SHANGHAI stocks fell yesterday amid concerns the first new share listings in four months will divert money from the market.
The key Shanghai Composite Index closed down 0.41 percent at 2,025.5 points.
Shares of Wuxi Xuelang Environmental Technology, Shandong Longda Meat Foodstuff and Feitian Technologies will debut on the Shenzhen Stock Exchange today, ending a four-month drought of initial public offerings.
The China Securities Regulatory Commission let 48 companies list in January and February, marking the end of a suspension of IPO approvals that began in late 2012, but was never officially confirmed.
However, there had been no listings since then and the CSRC didn’t clarify the situation until it said on Monday that it had given approval to 10 firms seeking to list in Shanghai and Shenzhen.
The new IPOs will divert funds from existing equities after the companies priced their offerings low, said Guangzhou Wanlong Securities Consulting.
The mean price-earnings ratio of the 10 firms is less than 18 times, compared with 29 times for the 48 earlier listings, the CSRC said late on Tuesday.
The first six listings drew 564 billion yuan (US$90.5 billion) in subscriptions, it said.
Shenyin & Wanguo Securities said the market yesterday was also hit by a price correction.
Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech fell 3 percent to 19.43 yuan after gaining 4.2 percent on Tuesday, while Rising Nonferrous Metals Share lost 3.6 percent to 37.82 yuan, paring a 7.7 percent gain from a day earlier.
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