China IPOs slow in first half 2011

SHANGHAI (Reuters) - China's IPO market slowed by a fifth in the first half of 2011 amid a lack of mega deals that hit the market the year before, with fundraisings dominated by small businesses, a trend that analysts said could last for a few more months.

In the first six months, only about one tenth of companies seeking a listing had chosen to do so on the Shanghai Stock Exchange while the rest had gone to the smaller Shenzhen bourse, which houses the Nasdaq-style ChiNext market.

Shanghai's sluggish IPO market had pushed down total IPO proceeds raised in mainland China by 20 percent from a year ago to $24 billion in the first half of the year, data complied by Thomson Reuters showed.

The trend may last for a while longer pending the launch of the long-awaited international board to allow top-quality multinationals such as HSBC and Coca Cola to sell shares to domestic investors, analysts said.

The two biggest IPOs in Shanghai this year were the $1.4 billion Sinovel Wind <601558.SS> IPO and the $710 million IPO of Pangda Automotive Trade <601258.SS>.

That pales when compared to the Hong Kong Stock Exchange which had seen a string of high-profile IPOs this year, including commodities trader Glencore's <0805.HK> $10 billion deal and Italian fashion house Prada's <1913.HK> $2.1 billion offering.

In Shenzhen, 136 companies raised a total of $16.6 billion on the ChiNext and the SME board in the first half, accounting for more than two-thirds of the total proceeds raised in mainland China.

The fundraising boom on the Shenzhen Stock Exchange helped lift Shenzhen-based investment banks, such as Guosen Securities and Ping An Securities to the top spots of the China IPO league table.
Guosen Securities secured the No.1 position in the first half of 2011, clinching 18 deals with a combined deal value of $2.8 billion, Thomson Reuters data showed. Guosen was ranked third in the same period last year.

Ping An Securities, a unit of Ping An Insurance <601318.SS> <2318.HK>, maintained its No.2 place with 17 deals worth $2.1 billion.

Swiss-bank UBS was ranked fifth with two deals worth $1.2 billion. UBS was the underwriter of the Pangda IPO as well as carmaker BYD's <002594.SZ> Shenzhen listing.
The Chinese joint venture of Deutsche Bank , which handled the Sinovel deal, the only IPO deal it had in the first half, was ranked 11th.

China was the world's largest IPO market in 2010, with 347 companies including Agricultural Bank of China <601288.SS><1288.HK> and Everbright Bank <601818.SS> raising nearly 490 billion yuan through first-time share sales in the domestic A-share market.