China’s IPO Freeze Melts Away
Many Chinese stocks which trade on American exchanges have caused quite a bit of controversy over the last few years. High returns, coupled with confusing accounting practices have made some investors wealthy, and well some broke. Its a tough call these days. Which Chinese companies are worth investing in, and which aren’t?
On Tuesday, traders and investors were welcomed to some interesting news stemming out of the country. China’s securities regulators approved the initial public offerings of five companies seeking to raise about $353 million. After more than a year of freezing initial public offerings, it looks like regulators paving the way for share sales to resume.
Neway Valve (Suzhou) Co. (NERQYZ:Shanghai) received approval for a first-time sale in Shanghai that could seek about 839 million yuan (or $138 million) and will start marketing its shares early next month. If your not familiar the company is a prominent maker of industrial valves. Alongside Neway a number of other smaller deals were announced encompassing everything from biotechnology to industrial goods.
China was the world’s largest IPO market in 2010 with a record $71 billion raised. But after the markets began to crack down on IPO quality, the country hasn’t had an initial public offering since October 2012. Securities regulators cracked down on fraud and misconduct among advisers and issuers. It was reported by Bloomberg that fifty companies are expected to be ready for the public markets by the end of January.
In the coming weeks we should have more information regarding the companies set to issue offerings. An interesting mix of technology and industrial manufacturing companies should add some fire to the Asian markets. Time will tell, but regulators have made it clear the offerings must be of satisfactory quality for investors.
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