Posted by: mulrickillion | January 4, 2012

Investors steer clear of Chinese IPOs in US

By Sarah Mishkin in Hong Kong, Jan 3, 2011 —

The value of Chinese companies delisting from US exchanges in 2011 exceeded the amount Chinese companies raised via initial public offerings in the US, a stark sign of how high-profile fraud allegations and slowing growth have made many foreign investors bearish on Chinese groups.

Chinese companies with a combined equity value of $3.5bn were taken private in 2011 by management, strategic buyers and private equity groups, according to data compiled by Roth Capital Partners, a California-based advisory firm. A further $4.3bn of potential deals remain in progress. In 2010, almost no such deals were completed, according to Roth.

In contrast, Chinese companies raised only $2.2bn through IPOs, about half what they raised in 2010, according to Dealogic and Thomson Reuters. No Chinese companies made it to market in the fourth quarter. According to Dealogic, $41.9bn was raised in total on US exchanges last year, down from $44.5bn in 2010.

Share prices of US-listed Chinese companies tumbled last year amid concerns about the sustainability of China’s growth and allegations of accounting fraud at some Chinese companies listed overseas. . . .

Investors steer clear of Chinese IPOs in US – FT.com

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Responses

  1. I think this is a learning curve thing, the first wave of Chinese companies didn’t get it right and it caused a loss of face. They’ll now regroup take some time working on doing it better next time and then another wave of Chinese IPO’s will hit.

    • I totally agree with you. Because it’s a bit too early in the game to conclude that Chinese IPOs in the United States will inevitably fail or reflect such a trend in the future. Thanks for your comment and insights.


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