March 3 (Bloomberg) -- China Galaxy Securities Co. plans to sell shares in Shanghai in what could be the nation’s biggest first-time stock offering this year after regulators ended a more than yearlong freeze on new listings.
China’s sixth-largest brokerage by revenue is planning to sell 1.69 billion shares, or an 18.4 percent stake, on the Shanghai Stock Exchange, it said in a filing with Hong Kong’s bourse yesterday. The stock ended trading last week in Hong Kong at HK$4.91, valuing the holding at about $1.07 billion.
Eight Chinese brokerages including Guotai Junan Securities Co., the nation’s third largest, are among the more than 600 IPO applicants awaiting approval from the China Securities Regulatory Commission, according to the watchdog’s website. Galaxy Securities isn’t on that list.
Chinese companies may raise as much as 250 billion yuan ($40.6 billion) this year from IPOs and first-time sales, according to He Zongyan, a Shanghai-based analyst at Shenyin & Wanguo Securities Co. Shaanxi Coal Industry Co.’s 4 billion yuan initial sale is the largest of the 48 Chinese IPOs that started trading this year, data compiled by Bloomberg show.
The coal producer, China’s third largest, was among the first companies to list after the regulator ended a halt on IPOs that began in October 2012 as it cracked down on fraud and misconduct among advisers and issuers. First-time share sales raised 98.8 billion yuan that year, compared with 2011’s 269 billion yuan, according to data compiled by Bloomberg.
Galaxy Securities shares in Hong Kong gained 1 percent to HK$4.96 as of 11:36 a.m. local time. The city’s benchmark Hang Seng Index fell 0.7 percent.
Galaxy, controlled by Central Huijin Investment Ltd., a unit of China Investment Corp., said in yesterday’s statement that proceeds raised from the Shanghai sale will be used to replenish its capital base and for operations. The brokerage won CSRC approval in December to set up 107 branches in China.
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