China Offers Up Premier IPOs to Revive Markets 大企业沪港上市政府借机重燃沪港生机

By newsdoug on September 26, 2011

China floods market with premier offerings Despite one of the worst IPO markets in the last 2 years, we’re seeing a sudden spurt of major Chinese state-run firms suddenly rush to make new listings in Shanghai and Hong Kong, in what looks like a behind-the-scenes campaign by Beijing to try and halt a recent skid in its stock markets. In the latest development of this new mega-IPO parade, Sinohydra Group, the nation’s biggest hydropower company and builder of the 3 Gorges Dam, is planning to raise $2.6 billion in a Shanghai IPO (English article); and China Communications Construction, a leading construction firm, is planning to raise $3.1 billion, also in a Shanghai offering. (English article) News of these two mega-offerings follows similar announcements last week by Shanghai-listed CITIC Securities (Shanghai: 600030), China’s largest brokerage, and Sany Heavy Industry (Shanghai: 600031), a top maker of industrial equipment, which said they planned to make Hong Kong IPOs worth $2 billion and $3.3 billion, respectively. Some quick math will show that these 4 offerings combined would suddenly flood Shanghai and Hong Kong with more than $10 billion in new shares, drawing away investment dollars from other firms in an already weak market. But at the same time, the offering of 4 such premier names all around the same time looks very suspicious to me, as all should be very attractive to investors. That leads me to suspect that this exercise and its timing is being quietly orchestrated by central government and stock market officials in a carefully choreographed plan to try and breathe some life back into these two sputtering markets, especially a Shanghai market that is trading near its 52-week low and has lost nearly a quarter of its value from its peak earlier this year. I have to applaud Beijing for its effort to try and bring back some excitement to the market, and also note that this kind of campaign could only happen in China, where many top firms still take their cues from Beijing. I would look for these attractive offerings to give the markets a short boost, but the downward trend will quickly come back unless global markets start to show some new life soon.

Bottom line: Beijing’s new campaign to bring some of its premier companies to market with new IPOs could provide a short lift for the sputtering Hong Kong and Shanghai markets.

尽管IPO市场处两年来最遭时期，但近来中国国有大型企业突然爆发，积极准备沪、港上市，看起来似乎是政府想要幕後使力，竭力想阻止股市下滑。比如，近来中国头号水电企业–中国水利水电拟A股IPO，计划募资26亿美元；中国交通建设亦计划通过上海上市，募资31亿美元。另外，中国头号券商–中信证券<600030.SS>上周宣布宣布H股上市，计划募资20亿美元；中国工程机械制造公司–三一重工拟H股IPO，募资33亿美元。综合四起IPO，你会发现沪、港两市会突然涌出超100亿美元的新股，在市场本已非常疲软的情况下，吸引走其他企业的投资。但同时，四家超大企业约同时进行IPO看起来令人生疑，四起IPO对投资者应该都有很大吸引力。这让我怀疑，所有这一切是否都是政府与股市官员刻意安排，为两个持续疲软的市场注入一些生机与活力，尤其是沪综指交投点位接近52周低位，较今年稍早高点缩水近四分之一。政府竭力为市场增添生机，这点我不得不拍手称赞，但要指出的一点是，这种事情只会在中国发生，因很多大国企仍听从政府的指挥。这些企业上市短期会提振股市，但是，全球市场如不重现生机，那麽沪港两市很快会回归颓势。

一句话：中国政府推动其金牌大企业上市，可能为疲软不堪的沪港股市提供短期支撑。

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