SHANGAHI, China, April 30 /Xinhua-PRNewswire/ --
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Indicator Value Change
March 2008: 238.7
February 2008: 305.0
Month-to-month change: -21.7%
March 2007: 244.5
Year-to-year change: -2.4%
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Highlights
The IPO indicator dropped 22 percent from the end of February through March, from 305.0, to 238.7. This is the largest month-to-month percentage decline since December 1997 and brings the indicator value to a twelve-month low, or 2.4 percent below its value one year ago.
Analysis
Seven stocks were removed from the indicator and five newly issued stocks were added, bringing the March total to 121. Of the 116 equities carried over from February, 112 dropped in price, and only four increased. All five newly listed stocks showed some decrease in market value, compared to their first-day trading prices.
The four equities that increased in value were small-cap stocks listed on Shenzhen Stock Exchange. Shenzhen Yuanwanggu Information (A share, 002161) showed the largest increase in market capitalization for the period. China Railway Group (A share, 601390; H share, 0390), China Railway Construction Group (A share, 601186; H share, 1186), Western Mining Co. (A share, 601168) and China Pacific Insurance Group (A share, 601601) contributed a combined 49.6 percent of the drop of the March indicator value. The downward adjustment is partly attributable to the government's efforts to "cool" the market but also reflects investor concerns about growth.
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. Companies are dropped from the indicator after twelve months.
Xinhua Finance/Milken Institute China Indicators
The Xinhua Finance/Milken Institute China Indicators provide investors, analysts, and financial professionals insight into China's money and capital markets. Five of the eight indicators have been launched since November 2006: the Renminbi Pressure Indicator, the Chinese IPO Indicator, the Market Adjusted Debt (MAD) Indicator, the Banking Strength Indicator (BSI), and the Adjusted Trade and Finance (ATF) Indicator. The remaining indicators (the China Mergers and Acquisitions Indicator, the China Privatization Indicator, and the China Corporate Governance Indicator) will be launched later this year.
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 Xinhua Finance and Bloomberg; 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 ("XFL") is China's premier financial information and media service provider 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's proprietary content platform, comprising Indices, Ratings, Financial News, and Investor Relations, serves financial institutions, corporations and re-distributors worldwide. Through its subsidiary Xinhua Finance Media Limited (NASDAQ: XFML), XFL leverages its content across multiple distribution channels in China including television, radio, newspaper, magazine and outdoor media. Founded in November 1999, XFL is headquartered in Shanghai, with offices and news bureaus spanning 11 countries worldwide. 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 .
