PwC forecasts sharp increase in IPOs in 2014
2014-01-03 16:05:12
A-share IPO activities will be robust in 2014 after having been suspended for more than a year, and the number of IPOs is expected to reach 300, a significant increase over 2012, PricewaterhouseCoopers (PwC) said in a report released Thursday.
Total funds raised by A-share IPOs are expected to be around 250 billion yuan ($41 billion) in 2014, according to the PwC report.
Among the 300 new listings, 40 are expected to be on the main board of the Shanghai Stock Exchange, with 260 on the small and medium-sized board and the Growth Enterprise Board (also known as ChiNext) of the Shenzhen Stock Exchange, said Frank Lyn, managing partner at PwC China, at a press conference in Beijing.
The newly listed firms will be mainly in the manufacturing, retail, service and technology sectors, Lyn said.
The amount of funding raised by individual companies is expected to fall compared with previous years, considering the regulator's desire to strengthen support for small and medium-sized firms, said Sun Jin, an assurance partner at PwC China.
The China Securities Regulatory Commission (CSRC) resumed approvals of IPOs on Monday, giving the green light to five applicants including Jiangsu-based Neway Valve and Zhejiang Wolwo Pharma, after a 13-month suspension of approvals since November 2012.
Currently more than 700 firms are reportedly in the queue to get listed.
On Tuesday, the CSRC gave the go-ahead to six other firms including Shaanxi Coal and Chemical Industry Group and Beijing UTour International Travel Services.
PwC said the number of new IPOs this year will significantly outpace the 155 listings in 2012.
"The optimistic forecast is based on the CSRC's reforms, with the aim of moving toward a more market-driven IPO registration system rather than the existing administrative review-based approval mechanism," Sun said.
"The number of new listings in the A-share market could be more than 300 in 2014, given the lengthy suspension, but it is unlikely the regulator will clear all the applicants in the queue in one year," Liu Boyu, an analyst at ChinaVenture Group, told the Global Times on Thursday.
However, many retail investors are concerned that the resumed IPOs will dilute funding and drag down the overall performance of the market, leading to losses for existing stocks.