Sources told Bloomberg that companies owned by the state are expected to lead the initial public offerings in the mainland next year. China had already put an end to a 15-month ban on IPOs that began in September last year. The Bloomberg report said at least USD 11 billion could be generated from the share sales in the first half of 2014. Bloomberg News calculated the USD 11 billion from the filings made by 76 firms that are already approved or nearing approval to go public on China's two main stock exchanges in Shanghai and Shenzhen. It excludes the IPOs for startup firms planned on the ChiNext.
The people with knowledge of the matter said Shaanxi Coal Industry Co would lead the list, planning to raise up to USD 2 billion. The largest package shipper in the country, China Postal Express & Logistics Co, plans to gather USD 1.5 billion in its IPO. A source also said logistics firm and steel supplier China Railway Materials Co could raise around USD 1 billion for its expansion plans while another person also revealed that coking coal producer Huabei Mining Co will also raise USD 1 billion.
Ironfire Capital President Eric Jackson told Bloomberg in an interview, "It's going to be good for everyone. The Chinese can only invest in domestic stocks, so deciding to loosen the rules on IPOs will give Chinese more places to invest and hopefully take some air out of the property bubble." Ironfire Capital is a hedge fund based in Naples, Florida which makes investments in Chinese stocks.
The China Securities Regulatory Commission had said there will be 50 firms who are ready to go public by the end of January next year. According to a Bloomberg report, proceeds that would be raised from the IPOs will help lessen the pressure on Chinese firms that have become increasingly burdened by debt.
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