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IPO deals slump on mainland bourses

By WANG YING  (China Daily)

08:43, January 04, 2013

New York replaced Hong Kong as the world's top venue for initial public offerings in 2012, a report said on Tuesday.

The Chinese mainland stock markets in Shenzhen and Shanghai also ranked only fifth and ninth in attracting new listings because of a cooling economy, according to the report by accounting firm Deloitte Touche Tohmatsu Ltd.

Hong Kong, facing slower IPO activity in the first three quarters and tougher competition from other bourses in the Asia-Pacific region, lost its distinction as the world's largest IPO destination, which it had held for three years.

The city fell to fourth place with 62 IPOs and HK$89.8 billion ($11.6 billion) in fundraising volume in 2012. It had 90 new listings and HK$271.4 billion in listing proceeds in 2011, the report said.

The Shenzhen and Shanghai bourses registered 154 new listings and a combined 103.4 billion yuan ($16.6 billion) in 2012, a drop of 45 percent and 63 percent year-on-year.

"Without any heavyweight listings, the IPO funds raised by the two exchanges shrank significantly year-on-year. As a result of lower valuation for A-share IPOs stemmed from market transformation and weak corporate earnings, their respective IPO proceeds can only trail those of Hong Kong," said Edward Au, co-leader of national public offering group Deloitte China.

"The Bursa Malaysia surpassed the Shanghai Stock Exchange with proceeds from two mega-deals: Felda Global Ventures and IHH Healthcare, the fifth- and sixth-largest global IPOs of the year," he said .

Although Hong Kong had two large IPOs, from Haitong Securities Co and the People's Insurance Co (Group) of China, its listing performance was still behind that of the Tokyo Stock Exchange, which had the re-listing of Japan Airlines, the second-largest IPO worldwide in 2012.

"The poor performance of the A-share market and low evaluation of shares have forced many companies to reconsider their listing plan in the Chinese mainland," said Wang Hu, an analyst from Guotai Junan Securities Co Ltd.

The A-share market edged up only 3.17 percent in all of 2012.

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