Analysts: IPOs to remain common in 2012

BEIJING - As much as 300 billion yuan ($47.6 billion) is expected to be raised through IPOs on the Shanghai and Shenzhen stock exchanges this year, the accounting firm PricewaterhouseCoopers (PwC) said in a report on Wednesday.

The firm forecast Shanghai A shares will attract about 40 IPOs. And the Shenzhen SME Board and ChiNext, an exchange where shares mainly of high-tech companies are traded, will attract about 260 IPOs in 2012. PwC predicted those deals will raise 270 billion yuan to 300 billion yuan.

China managed to keep its lead position in the global IPO market in 2011 as measured by the IPOs held on and the money raised by its exchanges in Shanghai and Shenzhen.

Even so, the Chinese market is being hampered by the global economy, whose recovery has been slowed by high unemployment in the United States and the European debt crises.

"Many Chinese companies are preparing for IPOs and waiting for the right time to go public," said Frank Lyn, PwC China Markets Leader.

According to Lyn, IPOs will remain common on the Shenzhen SME Board and ChiNext in 2012, and will most often originate from companies in the industrial-products, retail, consumer goods and services, information-technology and financial-services businesses.

Looking back on 2011, the Shanghai and Shenzhen stock exchanges had 282 IPOs, 19 percent fewer than the year before, and raised 286.1 billion yuan, 41 percent less than 2010.

"The China capital market is facing some uncertainties and the IPO market activities were not as active in 2011 as in the previous year, due to the impact of global economic uncertainty," said Jean Sun, PwC China Assurance Partner. "But it is rational that the IPO market cooled down after a blowout in 2010."

In 2011, the Shanghai A-share market attracted 39 IPOs, an increase of 39 percent from the year before, and raised 105.1 billion yuan, a decrease of 44 percent from the year before.

"This once again reflects that small and medium-sized enterprises were very active and are becoming the main driving force in the IPO market," said Lyn.

The Shenzhen SME Board had 115 IPOs in 2011 and raised 101.9 billion yuan, less than in 2010. ChiNext ended 2011 with 128 IPOs, an increase of 9 percent from the year before, and raised 79.1 billion yuan, a decrease of 18 percent.

In 2011, manufacturers of industrial products had the most new listings on the Shanghai A-share market, with 54 percent; on the Shenzhen SME Board, with 48 percent; and on ChiNext, with 39 percent. Also sources of many IPOs were retailers and companies dealing in consumer goods, services and information technology.