The idea that this bull market began, and will end, in China is one that resonates - so even as markets closer to home struggle it’s worth keeping one eye on events in the east.
We noted back in the autumn that with Chinese IPOs it was business as usual during October, despite the discernible move downwards in the nation’s equity markets. But there were signs that the era of rocket-fuelled listings and an inexorable upward trend for Chinese new issues might be coming to a close.
Now the latest set of Chinese indicators is out from Xinhua Finance and the Milken Institute, for November. Their IPO indicator fell sharply as Chinese markets gave up their gains, logging its second largest decline in a decade.
Xinhau Finance says:
Demonstrating a growing belief that Chinese equities are overvalued and fears of tightening monetary policy to control inflation, investor interest cooled not only for Chinese stocks already listed on the exchanges, but also for most companies that went public in November.
Of the 188 equities added to the indicator in the past two months, the share price of just 15 increased, while 103 fell. Of the 12 companies floated during November, 10 are trading below their listing price.
The Shanghai Composite today? Down 6.81 points, at 5,386.53.
