Despite market volatility in the first six months of the year, PricewaterhouseCoopers (PwC) remains optimistic about market conditions for the rest of the year, and has raised its prediction of funds raised through IPOs in Shanghai and Shenzhen to RMB 500 billion in 2010.
At the "IPO Market Interim Review and Outlook for 2010" press briefing recently, PwC revealed that it expected the IPO market in Shanghai and Shenzhen to continue in the momentum into the second half of 2010. The total number of new listings may reach 300 including 25 listings in Shanghai and 275 on the Shenzhen SME Board and ChiNext. This would move China to become the number one in the global IPO market in terms of both the number and funds raised.
The total number of IPOs in the first half of 2010 is 176 as compared to no listings in the same period last year in Shanghai and Shenzhen Stock Exchanges. IPO funds raised amounted to RMB212.7 billion, which is greater than the RMB 187.9 billion IPO funds raised in the whole year of 2009. Meanwhile, Hong Kong has maintained one of the largest listing markets, after mainland China market, by fund-raising size in the first half of this year with a value of HK$50.3 billion, representing a 186% increase compared to the same period last year.
"The China IPO market, especially Shenzhen SME Board and ChiNext, has picked up significantly in the first half of the year, despite the uncertainties on global recovery and the Euro debt crisis impact causing greater market volatility. This really demonstrates that Chinese companies are developing well along with the continuing growth of domestic economy and become more mature. SMEs with growth potential are ready to raise capital in the market." said Frank Lyn, China Markets Leader of PricewaterhouseCoopers.
In the first half of this year, industrial products dominated new listings (43%) in terms of number, followed by information technology and telecommunications (27%) retail, consumer goods and services (26%), energy & utilities (3%) and financial services (1%).
"China's economic growth is expected to continue in the second half of the year. Unless some negative factors emerge, the IPO in Shanghai and Shenzhen will maintain the momentum and is likely to reach historical height this year," comments Charles Feng, PwC Beijing Lead Partner.