China Stock-Index Futures Drop as IPO Freeze Ends on Neway Debut

China’s stock-index futures fell as Neway Valve (Suzhou) Co. (603699) becomes the first company to start trading after a freeze on initial public offerings that lasted more than 15 months.

Neway Valve, a maker of industrial valves, will begin trading on the Shanghai Stock Exchange today, posing a first test of the securities regulator’s attempts to revive confidence in IPOs. China’s factory output and investment growth probably weakened in December, economists said before data due Jan. 20.

Futures on the CSI 300 Index (SHSZ300) expiring in February lost 0.6 percent to 2,211.60 as of 9:22 a.m. local time.

The Shanghai Composite Index (SHCOMP) climbed less than 0.1 percent to 2,023.70 yesterday and is up 0.5 percent this week. The CSI 300 Index rose 0.1 percent to 2,211.84 yesterday. The Hang Seng China Enterprises Index (HSCEI) retreated 0.1 percent. The Bloomberg China-US Equity Index, the measure of the most-traded U.S.- listed Chinese companies, fell 0.2 percent in New York.

Neway Valve and existing owners raised 1.5 billion yuan ($241 million) after selling 82.5 million shares at 17.66 yuan each, according to an exchange statement. The deal values the company at 46.5 times its 2012 earnings, compared with 33.9 times for its listed industry peers, Neway Valve said Jan. 8.

The securities regulator has approved IPOs for 52 companies since it ended the freeze last month, according to data compiled by Bloomberg.

Economic Data

China Cosco Holdings Co. (601919), the nation’s biggest shipping company, may move after saying it probably returned to profit last year.

China’s industrial-production gains probably slowed to a five-month low of 9.8 percent and gross domestic product grew 7.6 percent from a year earlier in the fourth quarter, based on the median estimates of analysts. The economic expansion will moderate to 7.4 percent this year as investment slows and overcapacity is squeezed, according to a survey last month.

The Shanghai index trades at 7.6 times 12-month projected earnings, near the lowest level since Bloomberg began compiling weekly data in 2005. Trading volumes in the index were 13 percent lower than the 30-day average yesterday.

The ChiNext Index of small-capitalization stocks slipped 1.4 percent yesterday. The gauge has surged 80 percent in the past 12 months, lifting the median market value of its components to a record $1.1 billion on Jan. 15.

That’s the highest ever relative to the benchmark Shanghai Composite, which has a median value of $784 million, and the biggest among small-cap measures in the world’s 10 largest equity markets. Gauges for small companies in Brazil, Russia and India have dropped at least 10 percent during the same period.

To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.