New issues by 150 firms to raise no more than 100 billion yuan in 2014
About 150 companies will make initial public offerings in China this year and their total financing won't exceed 100 billion yuan ($16 billion), which won't have a major influence on the nation's capital market, according to a report published by Ernst & Young Global Ltd on Monday.
The report said small and medium-sized offerings will lead the A-share IPO market this year, and the most popular sectors will be technology, media, telecoms, culture and entertainment, agriculture, environmental protection and new materials.
"The financing amount of IPOs this year will not be more than 100 billion yuan, so the A-share market will not be influenced a lot," Terence Ho, EY's greater China IPO leader, said.
Ho said that a statement from the State Council, the cabinet, released in May confirmed the reform direction of China's capital market and the establishment of a new share listing system featuring increased disclosure.
"After a bumper start to the year with the reopening of the Chinese mainland's exchanges to new listings, activity slowed because of approvals again being placed on hold for most of the second quarter," said Ivan Tong, who specializes in assurance and advisory services at E&Y.
"But with a further 100 companies now expected to list, and solid investor confidence across a range of markets including Hong Kong, the IPO market can be active in the second half," said Tong.
As of June 27, 664 companies were in line for approval, and more than 80 percent of them had released draft prospectuses.
China resumed IPOs in January after a freeze lasting longer than a year, and 52 companies went public in Shanghai and Shenzhen in the first half of this year, raising $5.7 billion.
Shaanxi Coal Industry Co achieved the largest IPO, raising 4 billion yuan.
Forecasts: IPOs won't have major sway on marketThere will be about 100 more IPOs through the end of the year and sales will be evenly spread over time, China Securities Regulatory Commission Chairman Xiao Gang said in a May 19 statement.
The E&Y report also said that IPOs in Hong Kong will raise HK$180 billion ($23.2 billion) this year.
"There will be some large-scale and a number of small and medium-sized IPOs in Hong Kong in the second half," said Ho. Ho added that technology, media, telecom and healthcare, consumer, finance and real estate shares will be popular in the Hong Kong market.
During the first half, 44 companies went public in Hong Kong, and they raised $10.4 billion.
The largest IPO was HK Electric Investments Ltd at $3.1 billion.
Ten Chinese companies went public in the United States in the first half, raising $3.1 billion. JD.com Inc made the largest IPO, accounting for 57 percent of the total.