More than 400 companies — mostly small and medium-sized enterprises — floated on the Shenzhen and Shanghai stock exchanges in China in 2017, the Financial Times reported Dec. 27, citing Ernst & Young data.
In spite of the record number of companies that listed in China in 2017, there were no large flotations worth more than 5 billion yuan, which meant IPO volumes only reached half the money raised in 2010.
Analysts say IPOs in China will be further enhanced in 2018 by a decision to include Chinese A-shares — companies listed on the mainland exchanges — in the flagship MSCI emerging markets index from June 2018, according to the report.
This comes after Stock Connect, which links Hong Kong's exchange with the Shanghai and Shenzhen exchanges to give overseas investors easy access to A-shares. Previously, overseas investors were subjected to capital restrictions when buying shares in China using the yuan.
On a global scale, almost 1,700 companies floated in 2017, an increase of 44% over 2016 and the largest number of IPOs since 2007, according to a separate FT report, citing Dealogic. Proceeds rose 44% to $196 billion, the highest amount reached since 2014, largely because of Alibaba's $25 billion listing.
In the U.S., companies raised $49 billion — double the $24 billion raised in 2016. European listings rose more than 40%, and China chalked a record number of deals, which helped raise the global count.
About 25 Chinese companies listed in the U.S. in 2017, raising a total of $4 billion, an 83% increase year over year, according to EY. Some of these companies were technology-focused and financial technology companies drawn by the dual-class stock structure allowed by the New York Stock Exchange.
As of Dec. 27, US$1 was equivalent to 6.56 Chinese yuan.