CAMC Engineering, the mainland's first initial public offering following the lifting of the ban on new listings, is 576 times oversubscribed by retail investors, boding well for a flood of new listings this year, according to the lead underwriter. The Shanghai market yesterday reflected this optimism, with the composite index closing up 0.12 per cent at 1,591.49 points. On Wednesday the index fell 5.33 per cent on fears a flood of new listings will drain liquidity from the market. Guosen Securities said 1.14 million retail investors had put up 204 billion yuan for the 60 million shares being offered by CAMC, a small international engineering contractor. In all, 48 million shares are going to retail investors and 12 million to institutional investors, whose portion was more than 100 times oversubscribed. The company is raising about 444 million yuan selling the shares at 7.40 yuan each. Guangda Securities analyst Zhu Haibin said the fall on Wednesday and yesterday was due in part to the large sum frozen for the application to buy CAMC and that this money could enter the market today. One reason for the slump was media reports that Industrial and Commercial Bank of China and Agricultural Bank of China would issue A shares this year, with ICBC raising more than 100 billion yuan, far above market estimates. In a rare official commentary yesterday, Xinhua warned that, despite the market's strong performance and the fact that more than 70 per cent of listed firms had completed their state share reform plans, not all the problems had been resolved. 'The operating results of the companies have not clearly changed. Of the 1,340 listed firms, 255 reported losses in the first quarter, nearly 20 per cent, compared with 15.85 per cent in the first half of last year. Speculation and insider trading, packaging profits, beautifying the accounts and other reporting irregularities continue. These problems cannot be solved overnight. A genuine bull market must have solid and strong foundations,' it said. The share sale is the first since the China Securities Regulatory Commission lifted a year-old ban on such offers that it imposed to allow the listed firms to gain approval of plans to make their state shares tradable. The CSRC is betting the market, up more than 30 per cent since January due in part to new regulations aimed at bolstering it, will be strong enough to absorb the share offers, which could total 100 billion yuan before the end of the year. The next two will be Datong Coal, which aims to raise between 1.68 billion and 1.89 billion yuan from a sale of 280 million A shares on the main board in Shanghai, and Shenzhen Coship Electronics, which aims to raise as much as 352 million yuan from an offering of 22 million shares in Shenzhen. The Bank of China last week said it had filed for a share sale in Shanghai, probably late this month or early next month.