SHANGHAI, China, March 23 /Xinhua-PRNewswire/ --
Indicator Value Change
February 2007: 232.0
January 2007: 231.5
Month-to-month change: 0.2%
February 2006: 181.2
Year-to-year change: 28.0%
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Highlights
The IPO indicator increased slightly in February 2007, from 231.5 the previous month to 232.0. Seven new equities were added to the indicator, of which five are small and medium-sized enterprises listed on Shenzhen Stock Exchange and two are listed on Shanghai Stock Exchange.
Industrial Bank Co. Ltd. (A share, 601166) raised $2.1 billion in its February 5 IPO, the largest so far this year.
The equities included in February's IPO Indicator showed a drop of 5 percent in market cap on Feb. 27, while the combined Shenzhen and Shanghai Stock Exchanges and Hong Kong Stock Exchange lost approximately 9 percent and 2 percent of their market cap, respectively.
Analysis
Of the eighty-seven stocks included in indicator, fifteen saw a decline in price, while seventy-two saw an increase. The A and H share prices of the Industrial and Commercial Bank of China (ICBC; A share, 601398; H share, 1398) and the Bank of China (BOC; A share, 601988; H share, 3988) continued to drop as the Chinese stock markets experienced downward adjustments. ICBC contributed to 69 percent of the decrease in the indicator's free-float market capitalization, while BOC contributed another 27 percent. Meanwhile, energy and infrastructure equities, including China Coal (H share, 1898), Daqin Railway (A share, 601006), and Hunan Nonferrous Metal (H share, 2626), showed strong performance. Three companies were deleted from the indicator after twelve months, and seven were added.
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.
Xinhua Finance/Milken Institute China Indicators
The Xinhua Finance/Milken Institute China Indicators are aimed at providing investors, analysts, and financial professionals deeper insight into China's money and capital markets. Three of the eight indicators were launched in November 2006: the Renminbi Pressure Indicator, the Chinese IPO Indicator, and the Market Adjusted Debt (MAD) Indicator. The remaining indicators will be launched in 2007.
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 .
