China IPO Market Reopens

The reopening of mainland China’s IPO market with seven new listings announced on Tuesday is good news for investors, although analysts said brokerages could be forced to slash their earnings forecasts after a four-month hiatus in activity.

The new offerings come after the China Securities Regulatory Commission (CSRC) said late on Monday it had given final approval to 10 firms seeking to list on the Shanghai or Shenzhen stock exchanges, giving an official green light to the IPO market which had been dormant since February.

While the new activity will be a relief for investors eager to put their money to work, it underlines concerns that mainland initial public offerings will fail to live up to expectations this year and brokers could be left to rue upbeat revenue forecasts.

The seven companies which include Guangdong Ellington Electronics Technology, Shanghai Beite Technology and Shanghai Lianming Machinery, aim to raise a total of about 16 billion yuan (£1.53 billion), according to their prospectuses published on Tuesday. Three will list in Shanghai and four on the smaller Shenzhen exchange.

The CSRC last month said it was planning about 100 new listings this year, which would take the expected 2014 tally to 150 or only half the number forecast by consultants including PwC.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza