BEIJING - China will continue to lead the global IPO market this year in terms of the number of new listings and the amount of capital raised, international accounting firm PwC said on Tuesday.

According to PwC, the total number of new listings will reach 320 in 2011, including 30 listings in Shanghai and 290 on the Shenzhen SME Board and ChiNext, with fund-raising exercises exceeding an estimated 400 billion yuan ($60 billion).

However, due to the potential lack of major IPOs in 2011, PwC forecasts that listing exercises this year may not raise funds as large as those in 2010.

The Shanghai and Shenzhen stock exchanges had 349 IPOs in total last year, raising 478.3 billion yuan, an increase of 155 percent from that of 2009.

Small and medium-sized enterprises were active during this period, becoming the main driving force in the IPO market, the PwC report said.

"While many large State-owned enterprises completed their IPOs in the past few years, the trend now will be listings by small and medium-sized firms," said Charles Feng, PwC China Beijing Lead Partner

The Shenzhen SME Board attracted 204 IPOs last year, with funds raised reaching 202.7 billion yuan, an increase of 378 percent from 2009, highlighting the importance of SMEs in the future of the capital market.

ChiNext, launched in October 2009, also showed robust development, with the number of new listings reaching 117, amounting to 95.4 billion yuan in raised funds. In addition, Shanghai had 28 A-share IPOs, raising 180.2 billion yuan.

Meanwhile, Hong Kong continued to sustain the largest listings market in the world, beyond the Chinese mainland, with capital raising via IPOs hitting HK$445.0 billion ($57.29 billion), representing a 79 percent increase from 2009. The funds raised through IPOs and Taiwanese Depository Receipts in the Taiwan market amounted to TW$ 59.3 billion ($2 billion), an increase of 53 percent compared with the same period last year.

In 2010, industrial products dominated the capital market in terms of the number of new listings. Information technology and telecommunications accounted for 35 percent of IPOs on ChiNext, and increased the sector's share on the Shanghai A-share market and the Shenzhen SME board, demonstrating the promising future of that industry and indicating that, since the launch of ChiNext, capital resources have been weighted in favor of growth and innovation-based enterprises.

China is committed to speeding up the reform of the economic growth model during the 12th Five-Year Plan (2011-2015), highlighting technology and innovation as pillars of the reform, said Feng.

"I believe small and medium-sized high-tech and growth enterprises will lead the capital market in the coming years."

China Daily

(China Daily 01/05/2011 page14)