China IPOs down 40 percent so far in 2011

BEIJING: The value of initial public offerings (IPOs) in China skidded 40 percent in the first three quarters of this year compared to 2010, Xinhua said, as a tepid domestic stock market discouraged firms from listing.

The value of IPOs stood at 230.5 billion yuan ($36 billion) between January to September, Xinhua said, citing data from Chinese stock exchanges in Shanghai and Shenzhen.

The fall-off in new listings was due to a drop in blockbuster offerings, investors' reluctance to keep supporting lofty stock valuations, and languid world equity markets.

The average price-to-earning ratio for small and medium-sized firms has eased to 45 this year, from last year's 52.8, Xinhua said.

Smaller firms have dominated China's sluggish IPO market this year and analysts expect that to continue, pending the launch of a long-awaited international board that allows global heavyweights such as HSBC sell shares to local investors.

The Shanghai stock market has shed 16 percent this year, in part due to uncertainty over the world economic outlook. That compares with a 20 percent drop in the MSCI Asia stock index.

Copyright Reuters, 2011