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China's equity financing highest in 5 years: Thomson Reuters

Xinhua, September 17, 2015 Adjust font size:

Chinese companies have raised 113.1 billion U.S. dollars from IPOs and follow-on offerings so far this year, the highest ever January-September period since 2010, Thomson Reuters said Thursday.

The data provider said that China's financial industry accounted for a large share of equity capital market (ECM) proceeds.

Driven by a flurry of equity issuance from Chinese brokerage companies, the financial industry raised 49.5 billion U.S. dollars, or 43.8 percent of the total.

Notable examples include Huatai Securities Co., which took the lead and raised 5 billion U.S. dollars from its IPO in Hong Kong. Guotai Junan Securities raised 4.8 billion U.S. dollars in Shanghai.

Securities firms rushed to increase capital to meet strong demand for margin financing during the bull market in the first half of the year.

A strong pipeline of Chinese new listings in Hong Kong could further boost proceeds raised by Chinese IPOs abroad, said Thomson Reuters, including the upcoming 3 billion U.S. dollar IPO of China Huarong Asset Management.

Other Chinese companies seeking sizable IPOs in Hong Kong under challenging market conditions include China Reinsurance Group and China International Capital Corp.

Globally, Chinese companies accounted for a majority of the IPO proceeds raised, with a 32.5 percent market share. The United States followed second with a 17.9 percent market share with 23 billion U.S. dollars.

UBS, from its 11th place during the first nine months of 2014, jumps to the top spot for China ECM underwriting, capturing 7.8 percent share. CITIC and Goldman Sachs ranked second and third with 7.6 percent and 6.7 percent share, respectively.

However, with the China market rout and recent IPO suspension, total ECM proceeds during the third quarter of 2015 slumped 75.6 percent to 16.3 billion U.S. dollars from 66.9 billion U.S. dollars in the the second quarter of the year. Endi