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Chinese Companies Raise Decade-High Amount in First-Half IPOs

Chinese companies raised the most this decade in first-half initial public offerings as Huatai Securities Co. and more than 170 other firms tapped the country’s financial markets.

Companies raised 215.3 billion yuan ($31.8 billion) from IPOs, said Tong Daochi, the China Securities Regulatory Commission’s director general of international affairs, at a conference in Shanghai. The amount is the highest so far this century for China, according to data compiled by Bloomberg.

China, home to the worst performing benchmark Asian stock index, may be the world’s biggest IPO market this year as companies are likely to raise 500 billion yuan in Shanghai and Shenzhen, PricewaterhouseCoopers said this month. The first-half tally doesn’t include Agricultural Bank of China Ltd.’s $19.2 billion July sale in Shanghai and Hong Kong.

“The rising interest in the small and medium board in Shenzhen and ChiNext definitely pushed the booming IPO market,” said Wesley Li, an analyst at research company ChinaVenture. “The regulator has also become more skillful in controlling the rhythm of approving new IPOs.”

Most of the IPOs in the first half were from companies selling shares on the small and medium-sized board and the ChiNext startup board, both in Shenzhen, said CSRC’s Tong.

Shanghai Slump

The nation’s stocks regulator is considering rule revisions that would make it easier for smaller Chinese companies to list in Hong Kong, Tong said.

The benchmark Shanghai Composite Index has declined 23 percent this year on concern measures by the government to control real-estate speculation and rising consumer prices will damp economic growth.

Stocks in China rallied yesterday, sending the benchmark index above 2,500 for the first time since June 28, as the prospect the government may relax its policy tightening measures spurred gains for the nation’s banks and property companies. The composite index was little changed at the 11:30 a.m. break in Shanghai.

China’s securities regulator allowed share sales to resume in June 2009 after a 10-month moratorium imposed to curb stock market volatility during the global financial crisis.

Huatai Securities’s IPO in February was the biggest in China since Metallurgical Corporation of China Ltd. in September. The Nanjing-based brokerage raised 15.69 billion yuan in its offering.

AgriBank Debut

Agricultural Bank’s debut in Shanghai on July 15 came after a drop in the city’s benchmark stock index this year, contrasting with the trading starts for its four largest local rivals, who went public in Hong Kong in 2005 and 2006 in the midst of a five-year bull market.

China will have 300 new listings in 2010, up from 99 last year, according to a July 5 release from PwC.

--Luo Jun, Eva Woo. With assistance from Frances Liu in Hong Kong. Editors: Joost Akkermans, Andreea Papuc

To contact the reporter on this story: Jun Luo in Shanghai at jluo6@bloomberg.net; Eva Woo in Beijing at ewoo9@bloomberg.net

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