ACTIVITY surrounding the initial public offering of Beijing Enterprises Holdings last week proves that there is still more than enough demand for quality China plays.
Nevertheless, there is concern that some would-be investors queuing for application forms for Beijing Enterprises had no clue what businesses the company was involved in.
Still, this was not a problem, because the name of the game is speculation, not long-term investing, in many cases. The most important thing to remember is that as the grey market price was surging, the stock was a sure winner.
All the successful applicant had to do was sell the shares on the first trading day and a windfall would surely come.
That is the idea anyway. And while it might be true, it could be a very precarious basis for making an investment.
Beijing Enterprises and Chu Kong Shipping made news last week as investors scrabbled for the companies' new shares. While the former is the investment arm of the Beijing municipal government, the latter is owned by the Guangdong provincial government.
The interest in these companies stems from the hopes of profitable asset injections from the parent company into the listed vehicle at bargain prices.