China's IPO rush creates crop of newly minted billionaires
Following 14-month IPO standstill that ended last year, more than 20 stocks started trading in January, creating two dozen new billionaires
China's world-best stock market rally made January the busiest month for IPOs in a year. It also created a bundle of new billionaires.
In the first six weeks of 2015, the world's second-biggest economy hatched about two dozen billionaires, many of whom are riding initial public offerings that investors are driving to their daily price-trading limits - a frenzy that harkens back to the IPO market of the late 1990s. Among the high-fliers are an airline, a video-game developer and a drug-store chain.
"IPOs have become very hot investment products in China," said Ronald Wan, chief China adviser at Hong Kong-based Asian Capital Holdings, a Hong Kong-based corporate advisory firm. "So all the controlling IPO shareholders become very rich afterwards - they become billionaires."
After a 14-month standstill beginning in October 2012, IPOs resumed in China last year. More than 20 new stocks started trading in January, the most since the same month a year earlier. The offerings follow a 49 per cent rise in the Shanghai Composite Index, the world's best-performing index in 2014.
The Shenzhen Composite Index, the smaller of China's two stock exchanges, is up 12 per cent in US dollar terms this year, Asia's highest returns and trailing just Russia and Saudi Arabia globally.
The Shenzhen rally has produced at least three new billionaires: Xiao Fen, whose electronics company, Shenzhen Fenda Technology Co, invested in a maker of Google Glass-like products; Ruan Hongxian, the chairman of Yunnan Hongxiang Yixintang Pharmaceutical Co, China's third-biggest publicly traded drug-store chain; and Zhou Wei, chairman of medical software developer Shanghai Kingstar Winning Software Co.