The Chinese mainland's IPO market slowed by a fifth in the first half of 2011 amid a lack of mega deals that hit the market the year before, with fundraisings dominated by small businesses, a trend analysts said could last for a few more months.
In the first six months, only about one-tenth of companies seeking a listing had chosen to do so on the Shanghai Stock Exchange while the rest had gone to the smaller Shenzhen bourse, which houses the Nasdaq-style ChiNext market.
Shanghai's sluggish IPO market had pushed down total IPO proceeds raised by 20 percent from a year ago to US$24 billion in the first half of this year, data complied by Thomson Reuters showed.
The trend may last for a while longer pending the launch of the long-awaited international board to allow top-quality multinationals such as HSBC and Coca-Cola to sell shares to domestic investors, analysts said.
"There will be larger IPOs coming to the market, especially if you take into consideration the international board, which we believe will be launched in the next six to 12 months," said Cao Xuefeng, head of research at Huaxi Securities in Chengdu, Sichuan Province.
The two biggest IPOs in Shanghai this year were the US$1.4 billion Sinovel Wind IPO and the US$710 million IPO of Pang Da Automobile Trade Co.
That pales when compared with the Hong Kong stock exchange, which saw a string of high-profile IPOs this year, including commodities trader Glencore's US$10 billion deal and Italian fashion house Prada's US$2.1 billion offering.
In Shenzhen, 136 companies raised a total of US$16.6 billion on the ChiNext and the Small and Medium Enterprise Board in the first half.
Shenzhen-based investment banks, such as Guosen Securities and Ping An Securities, led the domestic IPO league table.
Guosen Securities secured the No. 1 position in the first half of 2011, clinching 18 deals with a combined value of US$2.8 billion, Thomson Reuters data showed. Guosen was third in the same period of last year.
Ping An Securities, a unit of Ping An Insurance, maintained its No. 2 place with 17 deals worth US$2.1 billion.
Swiss-bank UBS was ranked fifth with two deals worth US$1.2 billion. UBS was the underwriter of the Pang Da IPO as well as car maker BYD's Shenzhen listing.
The Chinese joint venture of Deutsche Bank, which handled the Sinovel deal, the only IPO deal it had in the first half, was ranked 11th.
The mainland was the world's largest IPO market in 2010, with 347 companies, including the Agricultural Bank of China and China Everbright Bank, raising nearly 490 billion yuan (US$76 billion) through first-time share sales in the domestic A-share market.
The Chinese government not yet said when the international board will be launched but expectations have been running high in recent weeks that an announcement could come soon.
