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Shanghai shares drop most in 6 weeks on new IPOs

SHANGHAI stocks tumbled the most in six weeks today as investors are nervous about a new round of initial public offerings after China’s securities regulator announced a list of 28 companies that disclosed their IPO plans.

The key Shanghai Composite Index fell 1.5 percent, the biggest decline since March 10, to 2,065.83 points. Turnover was 81.7 billion yuan (US$13.4 billion) at the trading close.

The resumption of IPO weighted on the market and investors feared new shares will drain market liquidity, Qi Li, an analyst with Western Securities, said in a note yesterday.

The China Securities Regulatory Commission said over the weekend that 28 companies had disclosed their IPO plans, including 16 to be listed on the Shanghai Stock Exchange. The companies plan to raise a total of 12.7 billion yuan.

The disclosure hints that IPOs will resume soon after a two-month break. The announcement came as a surprise because the CSRC last week said the review of new IPOs may be delayed as applicants were required to update financial statements.

Since China lift the 14-month IPO moratorium in January, 48 companies have been listed and another 606 are waiting for regulatory approval.

Great Wall Motor Co Ltd fell among auto companies, dropping 4.6 percent to 32.82 yuan, after it cut its 2014 sale target by 30 percent. SAIC Motor Corp Ltd decreased 2.4 percent to 14.09 yuan. Sinomach Automobile Co Ltd slumped 6.4 percent to 16.70 yuan.




 

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