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More offerings for China and Hong Kong
2008-07-02
Stock exchanges in China and Hong Kong are set to shrug aside the market uncertainty and host a further 86 initial public offerings in the second half of 2008, according to an authoritative study published yesterday. Analysts at PwC believe that, providing the global economy does not deteriorate further, Shanghai will host another eight A-share offerings over the next six months, its mainland rival Shenzhen a further 46 and Hong Kong an extra 32. If the forecast proves correct, it is likely to ensure that greater China remains the world's largest centre for capital raisings from IPOs. It also testifies to the ongoing and strong pipeline of companies in the region that are in search of capital to fund expansion plans. Last year, exchanges in China and Hong Kong hosted $100bn worth of IPOs, amid soaring stock markets and bullish sentiment surrounding mainland growth prospects. The first half of 2008 has seen a sharp downturn in IPO activity, as issuers postponed listing plans amid global economic uncertainty. Severe snows in February and the Sichuan earthquake in May also affected Chinese investor sentiment. The report cites a combined 81 IPOs on the three exchanges in the first half of this year, although many have performed disappointingly after listing. PwC said that IPOs in Hong Kong this year had raised HK$50.3bn, 51 per cent down on the same period last year, although a further HK$80bn could be raised with listings in the second half. The report showed that IPOs in Shanghai have this year raised Rmb66.8bn, while listings in Shenzhen raised a further Rmb23bn. PwC predicts Shanghai will end the year with Rmb200bn worth of A-share offerings, while Shenzhen will finish with Rmb50bn. Last year the two mainland exchanges raised a combined Rmb477bn. Richard Sun, PwC partner and co-author of the report, said: "We believe investors are still confident in the companies that have solid fundamentals, and we believe the focus will be on sectors including retail and consumer goods and services." Chinese authorities are also expected to permit the listing of several state-owned financial services, power and transport companies, once equity markets stabilise. Meanwhile, retail subscriptions closed yesterday for Sociedade de Jogos de Macau (SJM), the gaming flagship of tycoon Stanley Ho. SJM is looking to raise up to US$653m in an initial public offering amid the rocky market conditions in Hong Kong. The IPO is expected to be priced on Thursday. SJM had sought to raise $1bn in February, an offering that was delayed partly as a result of regulatory queries relating to a dispute between Mr Ho and his estranged sister, Winnie, over shareholdings in SJM's parent, Sociedade de Turismo e Diversoes de Macau.
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