The first batch of blue-chip stocks to list under China’s registration-based initial public offering (IPO) system surged in their Monday debut despite tepidness in the broader market.
The listing of the 10 companies on the main boards in Shanghai and Shenzhen marks the full roll-out of China’s U.S.-style IPO mechanism, designed to make public share sales more market-oriented. The system had already been adopted by Shanghai’s tech-focused STAR Market, Shenzhen’s start-up board ChiNext and the Beijing Stock Exchange for small companies.
Shenzhen CECport Technologies Co, an electronic components distributor based in the southern technology hub Shenzhen, opened up 161% on Monday, and surged as much as 239%, after it raised 2.25 billion yuan ($327.18 million).
Under the new rules, no daily trading limit is set for shares listed after an IPO in their first five trading days. Previously, new stocks listed in China’s main boards could jump as much as 44% and slump no more than 36% at debut.
However, stocks listed on the main boards are still subject to the 10% daily trading limit afterwards.
Dencare Chongqing Oral Care Co, an oral products maker, opened up 98% and soared as much as 157.7%. Other companies, including Shaanxi Energy Investment Co, Both Engineering Technology Co, also rose between 50% and 120%.
China’s stock benchmark index, slipped roughly 0.3%, as investors focused on China’s drills around the Taiwan Strait and awaited more data to gauge the strength of China’s economic recovery after it dropped restrictive COVID-19 policies.
Reuters