China's IPOs Will Be a Gamble for the First Time in Years
- Shanghai’s new tech board will scrap IPO valuation cap
- Current listing rules mean stocks debut with 44% rally
A Chinese national flag flies as skyscrapers of the Pudong Lujiazui Financial District stand across the Huangpu River in Shanghai.
Photographer: Qilai Shen/BloombergThis article is for subscribers only.
For the first time since 2014, China’s new stocks could go either way on their trading debut.
In the country’s volatile equity market, one thing’s been a certainty: initial public offerings are valued at no more than 23 times earnings and always pop 44 percent on their first day. The trade is so predictable that IPOs are often thousands of times oversubscribed, regardless of what the company does or what its prospects are.