The first domestic initial public offering (IPO) by a mainland brokerage will be set in motion today with the publication of Citic Securities' listing prospectus. The Shenzhen-registered brokerage, under China's first multi-services financial holding company, would launch its IPO on Tuesday to raise 1.8 billion yuan (about HK$1.68 billion) by selling 400 million A shares, a source close to the firm said yesterday. Analysts have expected the IPO, followed by a Shanghai float, to open the floodgates for other mainland financial firms to tap the market for funds to strengthen themselves ahead of full-fledged foreign competition. The only traded brokerage, Shenzhen-listed Xinjiang Hongyuan, went public in 1994 as an investment and trust company. Citic, the country's second-most profitable brokerage in the past two years, has priced its IPO at 4.50 yuan, or 15 times last year's earnings. In October, before its IPO was put on hold at the last minute, it had plans to raise 2.76 billion yuan by selling the shares at 6.90 yuan each, or 23 times historical earnings. Only a year ago, Citic had harboured hopes of raising up to five billion yuan by selling the same number of shares, or about 16 per cent of its enlarged share capital. 'The first reason is a sluggish stock market,' the source said of the reduced fund-raising scale. 'Secondly, the entire securities industry is in a slump.' Mainland IPOs are usually priced at up to 20 times earnings. Citic's rush to launch the IPO near the end of the year at reduced prices veils concerns that the fund-raising scale would be further pared had it been delayed until next year. Policy uncertainties and regulatory crackdown on frauds have weighed down the stock market since the second half of last year. Official data showed stock market trading turnover fell 26.7 per cent year on year in the first three quarters, accompanied by a 28.7 per cent slump in stock market fund-raising. Most of the 124 mainland brokerages were believed to be making losses. For years, manufacturers dominated China's IPO scene, but Beijing has encouraged domestic financial firms to tap the capital markets since last year. Foreign investors are now allowed to take minority stakes in banks, securities firms and fund management companies. Beijing is to phase in greater foreign competition in its heavily shielded financial industry under agreements to join the World Trade Organisation last year. Citic's IPO underwriter Guangfa Securities is among several mainland brokerages eyeing stock listings. 'Citic Securities has led the charge because of its strong earnings and powerful background,' an analyst said. Citic has registered capital of 2.08 billion yuan and made a 630 million yuan net profit last year.