Tuesday June 30, 2009
SHANGHAI: Guilin Sanjin Pharmaceutical, the first firm to launch an initial public offering in China since September, started taking orders on Monday, expecting the offer to be heavily oversubscribed, dealers said. Analysts said the retail tranche of the IPO drew heavy demand from the early hours as investors believe Sanjin will shine on its debut due to ample liquidity in the market.
"As the first IPO, it is bound to appeal to retail investors and draw great amounts of subscription funds," Cai Junyi, an analyst with Shanghai Securities, told AFP. The company said last week it would raise 910.8 million yuan (133 million dollars), or 44 percent more than originally planned in its prospectus for the IPO. It said 20 percent, or 9.2 million shares, of the offering is available for institutional investors while the remaining 80 percent is earmarked for retail investors. Cai said that once Sanjin debuts on the stock exchange in mid-July, the price will have little to do with fundamentals and much more with market sentiment.
Guilin Sanjin said premarketing indicated the institutional tranche was 165 times oversubscribed. It is scheduled to announce the results of the subscriptions and the date of debut later this week. China's securities regulators halted IPOs in September due worries that pressure on liquidity would worsen the already ailing domestic stock markets.
The key index plummeted 65.5 percent last year as the global financial crisis kicked in. However, it has rebounded nearly 57 percent since the beginning of 2009 to become one of the world's best performing markets. More than 30 companies, including the country's largest home builder China State Construction Engineering Corp, have received initial regulatory approval but have been waiting for up to a year to sell shares to the public.
(AFPc)
"As the first IPO, it is bound to appeal to retail investors and draw great amounts of subscription funds," Cai Junyi, an analyst with Shanghai Securities, told AFP. The company said last week it would raise 910.8 million yuan (133 million dollars), or 44 percent more than originally planned in its prospectus for the IPO. It said 20 percent, or 9.2 million shares, of the offering is available for institutional investors while the remaining 80 percent is earmarked for retail investors. Cai said that once Sanjin debuts on the stock exchange in mid-July, the price will have little to do with fundamentals and much more with market sentiment.
Guilin Sanjin said premarketing indicated the institutional tranche was 165 times oversubscribed. It is scheduled to announce the results of the subscriptions and the date of debut later this week. China's securities regulators halted IPOs in September due worries that pressure on liquidity would worsen the already ailing domestic stock markets.
The key index plummeted 65.5 percent last year as the global financial crisis kicked in. However, it has rebounded nearly 57 percent since the beginning of 2009 to become one of the world's best performing markets. More than 30 companies, including the country's largest home builder China State Construction Engineering Corp, have received initial regulatory approval but have been waiting for up to a year to sell shares to the public.
(AFPc)
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