The Chinese mainland tops out as the world's biggest market in terms of funds raised from initial public offerings in 2007, surpassing the United States, an industry report said yesterday.

 

IPOs on the mainland will keep growing this year and rise to another record.

 

IPOs in Shanghai and Shenzhen topped 477.1 billion yuan (US$65.36 billion) in 2007, PricewaterhouseCoopers LLP said yesterday.

 

The figure for the US market, including the New York Stock Exchange, NASDAQ and American Stock Exchange, sat at 465.3 billion yuan, ending December 20.

 

Companies raised more money selling stock on the Chinese mainland last year than in the previous six years combined as the government urged state-owned companies already listed in Hong Kong to return to the mainland stock market.

 

The value of initial public offerings will grow to 480 billion yuan this year on the Chinese mainland, PwC said.

 

Up to 35 companies are expected to go public on Shanghai and Shenzhen's main board while 100 companies are expected to get listed on the board for small- and medium-sized enterprises in Shenzhen this year, the accounting firm said.

 

"Red-chips will be one of the main waves this year," said Richard Sun, a PwC partner in Hong Kong.

 

Red-chips, companies incorporated overseas and traded in Hong Kong, are expected to be traded on the mainland stock market in the second half of this year.

 

Red-chips are expected to raise about 140 billion to 150 billion yuan on the Chinese mainland this year.

 

"The return of red-chips is a set trend no matter what form it may take," said Frank Y C Lyn, China markets leader of PwC.

 

Another source of IPOs this year will be the return of H-shares, which was the main driver for last year's IPO activities on the Chinese mainland.

 

China-incorporated companies already trading in Hong Kong are known as H-share companies. The group, including Ping An Insurance, China Life Insurance and China Construction Bank, accounted for almost three-quarters of money raised in first-time sales in Shanghai last year.

 

They'll make up a smaller share of yuan-denominated new sales this year - about six to seven H-share companies are expected to return to the A share market this year.

 

The IPOs will be concentrated in industries including finance, telecommunications, retail and property.

 

(Shanghai Daily January 4, 2008)