Chinese Initial Public Offering Indicator Reaches Historic High as Stock Markets Rebound

2007-04-19 18:00 926

SHANGHAI, China, April 19 /Xinhua-PRNewswire/ -- Xinhua Finance Limited and the Milken Institute today release the media update on the Chinese Initial Public Offering Indicator for March.

March 2007: 244.5

February 2007: 232.0

Month-to-month change: 5.5%

March 2006: 187.6

Year-to-year change: 30.3%

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China's stock markets continued to rise in March, despite slumps in late February; and the IPO Indicator reached an historic high at the end of the period, up 12.5 points, to 244.5 from the previous month's score of 232.0. Four equities were added to the indicator, which comprises small and medium-sized enterprises listed on Shenzhen Stock Exchange.


Of the ninety-two stocks included in the March indicator, nineteen declined in price, while seventy-one increased. The rise in the IPO Indicator score is attributable chiefly to gains in financial-sector stocks; the Bank of China (A share, 601988; H share, 3988), Industrial and Commercial Bank of China (A share, 601398; H share, 1398), and Industrial Bank (A share, 601166) together contributed to 58 percent of the increase in score. Given the large market-capitalization share of bank stocks in the indicator, the sector will continue to influence scores. In addition, energy and infrastructure equities, including China Coal (H share, 1898) and Daqin Railway (A share, 601006), showed ongoing strong performance. Two companies were removed from the indicator, and four newly listed companies were added.


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. Companies are removed from the indicator after a period of twelve months.

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.

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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 .

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 .

Source: Xinhua Finance; Milken Institute