China’s IPO market

INTRO

China's IPOs slumped in 2012, with newly listed A-share companies and fundraising at a three-year low.

But where the number of new listed companies fell - the business of selling shares and rights in existing companies - boomed.

According to a leading Chinese financial data provider, some 150 Chinese firms raised a combined 14.7 billion U.S. dollars through IPOs in Shanghai and Shenzhen last year, down 45.2 percent and 63.4 percent from 2011, respectively.

Data from the Wind Information Co. showed the number of IPOs and total funds raised both slumped to their lowest point since 2010.

Among all A-share IPO applicants last year, 78.2 percent had their applications approved, rising slightly from 76.8 percent in 2011.

The figure remained low compared with 85.9 percent in 2009 and 83.5 percent in 2010.

Amid a lackluster IPO market, China's refinancing market in 2012 was in full swing.

Listed companies raised 55 billion dollars by issuing additional shares and another 1.9 billion dollars by issuing rights.

The scope of the refinancing market expanded to nearly four times the scope of the IPO market last year, offering alternatives for companies to stay afloat financially.

Meanwhile, 321 listed companies proposed plans for issuing additional stock, while another 122 firms had their refinancing plans approved.

Industry insiders warned that unlimited sprawl in the refinancing market may cause a massive increase in stock supplies and create liquidity pressure.

The insiders called for more refinancing audits and transparent information disclosures.

Chinese stocks gained just 3.17 percent for 2012 over concerns about the country's slowing economic growth.

However, shares have jumped more than 14 percent since the end of November, offering investors hope for the market's performance this year.