The mainland transacted US$95.9 billion worth of mergers and acquisitions, equity and debt in the first half of this year as the reformation of the mainland capital markets gained more solid footing. The mainland topped the Asia-Pacific excluding Japan league tables for mergers and acquisitions, attracting 1,159 deals totalling US$55.2 billion, according to data from Dealogic. That includes domestic deals and foreign firms buying mainland companies. First-half volume rose 40 per cent from the first half of last year, which attracted US$39.4 billion from 1,022 deals. Deals involving domestic parties represented 75 per cent or US$40.7 billion of all merger and acquisition transactions in the first half. Foreign firms buying into mainland companies made up the rest. 'We expect [the heavy volume of domestic transactions] to continue over the next six to 12 months and it reflects the continuing drive of companies to leverage on strong market conditions,' said Frank Xu, the head of mergers and acquisitions for China International Capital Corp. 'Historically, as many state-owned enterprises spun off only part of their operations, they have a lot of assets outside the list of companies that they would like to inject to boost the value of those assets.' Mainland firms paid US$7.9 billion in 63 deals overseas, down 19 per cent from the US$9.7 billion from 46 deals in the first half of last year, according to Dealogic. It said equity capital market volumes rose six times to US$20.2 billion off a low base from a year ago. Beijing reopened its equity capital market in May last year following a year-long hiatus, after executing a share reform programme. Follow-on share offers led the half with 24 firms raising US$14.7 billion, or 72 per cent of the total. Domestic mainland initial public offerings from 39 companies raised US$5.6 billion. 'The market for initial public offerings will be even more active in the second half,' said Li Jian, the executive director of Gao Hua Securities. 'Liquidity is still strong and red-chip companies are coming back.' Several red chips, or mainland companies incorporated overseas, such as China Mobile, CNOOC, Lenovo Group and many others have been tipped to sell A shares. Beijing wants to attract such firms, generally considered the best in the country, to list on domestic exchanges to raise the quality of shares on offer and soak up excess liquidity that is pushing share prices sky high. Mainland companies raised US$12.6 billion from bond sales in the first half, 44 per cent more than the US$8.8 billion raised over the same period the year before. Beijing is trying to develop a mature corporate bond market to draw funds from the stock market and weaken reliance on bank loans. The China Securities Regulatory Commission last week strengthened oversight of local ratings agencies and is taking over oversight of corporate bond issuances from the National Development and Reform Commission, which will still oversee short-term debt of a year or less.