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Xinhua Finance/Milken Institute Chinese IPO Indicator Update: IPO Indicator Reaches New High Despite Mainland Market Corrections

Xinhua Finance; Milken Institute
2007-07-23 19:18 3033

SHANGHAI, China, July 23 /Xinhua-PRNewswire/ --

Indicator Change

June 2007: 254.3

May 2007: 251.1

Month-to-month change: 1.3%

June 2006: 185.8

Year-to-year change: 36.9%

(Logo: http://www.prnasia.com/sa/200701191008.jpg )

Click http://www.xinhuafinance.com/en/charts/ipo_rpi/0707/ipo_chart0707.jpg to download the chart.

Highlights

The IPO indicator reached a new high of 254.3 at the end of June, despite a series of policy actions taken to cool down the overheated stock market. Three stocks were added to the indicator, and one was deleted, bringing the total to 112.

Analysis

Of the 110 equities included in the indicators in both May and June, seventy-six dropped in price and thirty-four increased. Prices for the Industrial and Commercial Bank of China (ICBC; A share, 601398; H share, 1398)'s A and H shares showed signs of convergence as mainland investors were allowed greater access to invest in Hong Kong-listed issues. Its A shares made the largest single negative contribution to market capitalization, while its H shares were the most positive factor toward the indicator market value increase in June. In addition, three coal companies -- China Coal (H share, 1898), Shanxi Lu'an (A share, 601699), and Huolinhe Opencut (A share, 002128) -- contributed to 22 percent of the increase in the indicator's market capitalization.

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 removed 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 three indicators (the China M&A 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 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 www.xinhuafinance.com/indicators and www.milkeninstitute.org/chinaindicators.

Xinhua Finance Limited 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), Xinhua Finance leverages its content across multiple distribution channels in China including television, radio, newspaper, magazine and outdoor media. Founded in November 1999, Xinhua Finance is headquartered in Shanghai, with offices and news bureaus spanning 11 countries worldwide.

For more information, please visit 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 www.milkeninstitute.org.

Contact information:

Xinhua Finance

China

Ms. Joy Tsang

Tel: +86-21-6113-5999 or +852-948-64363

Email: joy.tsang@xinhuafinance.com

Mr. Scott Zhang

Tel: +86-21-6113-5996

Email: scott.zhang@xinhuafinance.com

Japan

Mr. Jiong Sun

Tel: +813-3221-9500

Email: jsun@xinhuafinance.com

Taylor Rafferty (Media contact for Xinhua Finance)

Japan

Mr. James Hawrylak

Tel: +813-5733-2621

Email: James.hawrylak@taylor-rafferty.com

United States

Mr. John Dudzinsky

Tel: +1-212-889-4350

Email: John.Dudzinsky@taylor-rafferty.com

Europe

Faisal Kanth

Tel: +44-20-7614-2900

Email: Faisal.Kanth@taylor-rafferty.co.uk

Milken Institute

Ms. Jennifer Manfre,

Associate Director of Communications

Tel: +1-310-570-4623

Email: jmanfre@milkeninstitute.org

Source: Xinhua Finance; Milken Institute
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