China's IPO market slowed by a fifth in the first half of 2011 amid a lack of mega deals that hit the market the year before, with fundraisings dominated by small businesses, a trend that analysts said could last for a few more months.
In the first six months, only about one tenth of companies seeking a listing had chosen to do so on the Shanghai Stock Exchange while the rest had gone to the smaller Shenzhen bourse, which houses the Nasdaq-style ChiNext market.
Shanghai's sluggish IPO market had pushed down total IPO proceeds raised in mainland China by 20 per cent from a year ago to $24 billion in the first half of the year, data complied by Thomson Reuters showed.
The trend may last for a while longer pending the launch of the long-awaited international board to allow top-quality multinationals such as HSBC and Coca Cola to sell shares to domestic investors, analysts said.
'There will be larger IPOs coming to the market, especially if you take into consideration the international board, which we believe will be launched in the next six to 12 months,' said Cao Xuefeng, head of research at Huaxi Securities in the south western city of Chengdu. The two biggest IPOs in Shanghai this year were the $1.4 billion Sinovel Wind IPO and the $710 million IPO of Pangda Automotive Trade.
That pales when compared to the Hong Kong Stock Exchange which had seen a string of high-profile IPOs this year, including commodities trader Glencore's $10 billion deal and Italian fashion house Prada's $2.1 billion offering.
Source : New Age
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