China’s IPOs Outperforming U.S., Europe

Your next video will start in

Recommended Videos

  • Info

  • Comments


March 31 (Bloomberg) –- Bloomberg’s David Ingles reports on the average return for 2014 IPOs with China leading the way with 54%. He speaks to Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)


It has been a tough run for chinese investors the past few years, but some businesses have been money makers.

The retail investor liking the chinese i.p.o. which they haven't been able to touch for 15 months.

There is some sort of pent-up demand here.

So we've seen a resurgence in volume and we've also seen a surge in -- 48 firms, 50 firms hit the market for cash flow here between shanghai and shen-jin.

We see average return so far 54% for those that went i.p.o. in china.

Average return for an i.p.o. 54%? so far this year.

That's about the number you get.

Compare that to the rest of the world, 9%. we also have a trend in the last decade which we have seen in china, so it is not exactly reflective of how the market has performed.

We all know that chinese security regulators there has taken aim at this colusion that typically happens when an investor goes around, spills the books.

What they have done, they have put rules in place to make sure that a lot of these i.p.o.'s are priced reasonably.

So you mean regulators are more at play than market forces?

That's the other thing as well.

There is always the other side of the coin.

When the government says we want to give market forces a bigger part in determining where the prices should be -- and it's not happening right now.

You could also argue when people collude it is not relevantly indicative of market success.

Well, yes, there is that.

We have 48 firms listing in china.

Only 8 of them priced their i.p.o. above industry average.

If you choose to do so, then you have to come out with disclosures and disclose the risk, sms that is a little bit of a red flag there.

And obviously the firms are the losers here because they could have raised more money given how the shares have actually turned out.

The small investors don't necessarily have the same, i guess, understanding.

So in this i.p.o. basket it is not fair to say we are comparing apples to apples, because the chinese regulators are really making this apples to originals.

Or apples to grapes.

Or whatever chinese fruit you want to choose.

A little bit of slowing growth for some banks.

A bank from the chinese northeast, second biggest in hong kong this year.

Mid-sized lender, harbin bank, $992 million.

They have prized the i.p.o. at -- here's a fall-off of the rate.

So you want to compare with what, i guess the current price would be doing later on, it is

This text has been automatically generated. It may not be 100% accurate.


BTV Channel Finder


ZIP is required for U.S. locations

Bloomberg Television in   change