January IPO Indicator Shows First Drop Since July 2006
SHANGHAI, China, Feb. 26 /Xinhua-PRNewswire/ --
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Indicator Value Change
January 2007: 231.5
December 2006: 237.8
Month-to-month change: -2.66%
January 2006: 156.8
Year-to-year change: 47.6%
Click http://www.xinhuafinance.com/en/charts/ipo_rpi/0702_ipo.html to download the chart.
Highlights
The IPO indicator dropped 2.66 percent in January 2007, from 237.8 to 231.5. Chinese IPOs this month raised a total of $789 million. Of the ten newly listed companies, nine are small and medium enterprises listed on Shenzhen Stock Exchange and one is listed on Shanghai Stock Exchange.
Analysis
For the first time since July 2006, the IPO indicator dropped -- by 2.66 percent in January 2007. Of the eighty companies included in both this month's and last month's indicator, six saw a decline in price, while seventy-four saw an increase. The Industrial and Commercial Bank of China (ICBC) alone contributed 71 percent of the decrease in the indicator's float-adjusted market capitalization, while the Bank of China (BOC) contributed another 28 percent. The A share price of ICBC dropped 20 percent in the past month, and its H share price dropped approximately 6 percent, which is not uncommon after the initial sharp run-up in price. One company was deleted from the indicator after staying for twelve months, and ten newly listed companies were added. The ten January IPOs were all on the Shanghai and Shenzhen stock exchanges.
Methodology
A stock's float-adjusted market capitalization over time forms the basis for indicator calculations. Stock dividends, stock splits, special dividends, share consolidations, repurchases, spin-offs, and combination stock distributions may trigger adjustments to the indicator values. Only companies incorporated and domiciled in mainland China that go public on the Shanghai, Shenzhen, and Hong Kong stock exchanges are included.
Time Period Coverage and Frequency
New companies are added to the indicator as soon as they are listed, while current companies are removed after twelve months. The IPO Indicator has a base date of December 31, 1997, when the indicator's value was set equal to 100, and covers the period from December 31, 1991, to the present. Values are calculated on a monthly basis. The indicator for each month is released in the third week of the following month.
Sources of Data
The real-time and historical trading data used in the construction of this indicator are provided by Bloomberg and Xinhua Finance; underlying information used to calculate the float ratio is obtained from a variety of sources, including Xinhua Finance's subsidiary Mergent, stock exchanges, regulators, and the companies themselves. Corporate actions are sourced from Xinhua Finance, regulatory filings and news services.
To view additional information, visit http://www.xinhuafinance.com/indicators and http://www.milkeninstitute.org/chinaindicators .
Xinhua Finance Limited is China's unchallenged leader in financial information and media, and is listed on the Mothers board of the Tokyo Stock Exchange (symbol: 9399) (OTC ADRs: XHFNY). Bridging China's financial markets and the world, Xinhua Finance serves financial institutions, corporations and re-distributors through four focused and complementary service lines: Indices, Ratings, Financial News and Investor Relations. Founded in November 1999, the Company is headquartered in Shanghai with 20 news bureaus and offices in 19 locations across Asia, Australia, North America and Europe. For more information, please visit http://www.xinhuafinance.com .
The Milken Institute is a nonprofit, independent economic think tank whose mission is to improve the lives and economic conditions of diverse populations around the world by helping business and public policy leaders identify and implement innovative ideas for creating broad-based prosperity. The Milken Institute has extensive expertise in China and conducts ongoing research on China's banking and capital markets. It is based in Santa Monica, Calif. For more information, please visit http://www.milkeninstitute.org .
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