Listing by China’s biggest investment bank, first flotation of Chinese depositary receipts in Shanghai set stage for Ant dual IPO
- China ranks second with US$55.1 billion raised through IPOs this year, according to Bloomberg, behind New York and ahead of Hong Kong
- Investor enthusiasm and a government push for more listings by home-grown technology companies have fuelled a boom in IPOs this year
All eyes are on Shanghai, where four out of five initial public offerings (IPOs) are due this week in China, including the country’s very first sale of Chinese depositary receipts (CDRs). The four Shanghai IPOs will raise a combined 16.3 billion yuan (US$2.4 billion), extending a bull run in the world’s second-largest capital market.
China’s biggest investment bank and an electric carmaker are among the five IPOs that open to public subscription this week. A world-beating run-up in China’s onshore stocks and a boom in the IPO market has stoked optimism that China International Capital Corporation (CICC) stands to benefit more than its smaller rivals. Meanwhile, Ninebot, a maker of smart electric scooters, will be the first company to float CDRs on Shanghai’s technology-heavy Star Market.
Investor enthusiasm and a government push for more listings by home-grown technology companies have fuelled a boom in China’s IPO market this year. A total of 113 companies have raised a combined 187 billion yuan on the Star Market alone in the first nine months, which beats a full-year estimate of 144 billion yuan by Tianfeng Securities. China ranks second with US$55.1 billion raised through IPOs so far this year, according to Bloomberg data, behind New York with US$63 billion raised, and ahead of Hong Kong, which has raised US$29.2 billion.
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Ant Group poised to be world’s biggest private firm making public debut, with Hong Kong-Shanghai IPO
Unlike in Hong Kong, where IPO shares can decline during trading debuts, subscription to new shares floated on the mainland is a lucrative and sure shot bet, with stocks typically soaring on their first day of trading. First-day gains on the Star Market are even more stunning, as there is no cap on how much new listings can rise or fall during the first five days of trading.
“With a bunch of IPOs in the pipeline, decent gains from listings will continue to attract funds to new share subscriptions,” said Zhang Qiyao, an analyst at Guosheng Securities. “Liquidity will be an important driver for the capital market this year.”