A flood of initial public offerings (IPOs) by mainland companies in the next two months will add a substantial supply of new shares to the depressed local share market and could further pressure valuations.
Taking the lead is the US$3.18 billion to US$3.68 billion international offering by China Telecom, which hopes to list on the local main board by the first week of next month.
The initial market response has been lukewarm, leading the fixed-line giant to sweeten its share offer by increasing its dividend yield from about 2.6 per cent to between 3.6 per cent and 4.1 per cent.
Another major offering from Standard Chartered Bank - although not a mainland firm - is also expected to be completed this month.
A secondary listing of the London-based bank, which derives most of its profits from Asia, was approved two days ago and a listing target of October 31 has been set. The bank is expected to offer 29 million to 30 million new shares at up to 5 per cent below its London price as of October 25 to raise about US$300 million.
CNOOC Services - a subsidiary of China National Offshore Oil Corp - is expected to have its main board H-share application heard by the stock exchange's listing committee within the next two weeks, market sources said.