Firms Assured of Making Money as IPOs Returned
The return of four firms initial public offerings in China has been welcomed by investors who believe that they are now assured of making money from buying low priced new shares. The IPOs drew a huge demand last week after emerging a four month hiatus on the offerings as auto parts maker Shanghai Lianming Machinery Co. has attracted interest 500 times the amount of its initial offering of its online portion of its sale.
The China Securities Regulatory Commission has allowed ten companies to sell new shares to potential investors which is jump start China’s IPO market after months of being suspended in new listings. The first four firms are allowed to list have raised 1.8 billion yuan that was published on the Shanghai and Shenzhen stock exchange. These four firms received a combined 380 billion yuan in valid subscriptions orders earlier this week from investors which only shows that these firms share were already oversubscribed.
Unsuccessful bids will be returned to investors which means that the market will see a large inflow of cash earlier this week and the robust demand for new shares subscription in the past days have stirred the stock and bond market. The benchmark fell 2 percent partly due to fund outflows as investors have geared up to make orders.