Introducing the China IPO indicator

Here’s a sober chart tracking the boom in Chinese new issues — quite frightening, isn’t it?

China IPO indicator

Tracking mainland Chinese companies that go public on the Shanghai, Shenzhen and Hong Kong stock exchanges, this newly launched China IPO indicator advanced 6.6 points, or 2.7 per cent, in April. Fourteen equities were added to the indicator during the month, including CITIC Bank, which raised $5.4bn. Of 93 stocks included in the March and April indicators, 21 fell during the period, while 72 rose.

Year-on-year, the indicator is up 36.3 per cent.

This is one of five Chinese indicators launched jointly by Xinhua Finance, the Chinese financial information group, and The Milken Institute. The others chart Renminbi Pressure (see separate post), Market Adjusted Debt, Banking Strength and Adjusted Trade and Finance.

Three more indicators are planned for later this year, covering M&A, Privatisations and Joint Ventures, and Corporate Governance.

For what it’s worth, China’s stock market hit fresh highs on Tuesday, with the Shanghai Composite up more than 1 per cent to 4114. Turnover was $16bn, reflecting hectic trade. Speculators have largely ignored last week’s rise in interest rates and instead seem to have been comforted by comments from a Chinese central bank adviser, saying the government was unlikely to interfere directly in the domestic stock market.

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