The year of 2007 is regarded as a year of overheating for the Chinese economy, especially in the financial market. This year, IPOs and domestic merger and acquisition activities in China increased continually. Overseas investors are envious of the booming capital market in China; however, they are also cautious about the future success of capital raising and economic growth.
The Financial Times writes about this year’s IPO status quo and forecasts for next year:
Overseas stock exchanges could be forgiven for feeling a pang of envy this year as they watched the flood of initial public offerings in China and India. The capital markets in each country benefited from record levels of activity, fuelled by soaring growth.
On numbers China is ahead of India, though a straight comparison is unkind given that the mainland has some catching up to do, not having recognised the concept of publicly listed equity until 1991. Combined issuance this year by Chinese companies is on course to generate more than $100bn, with an estimated $65bn raised by A-share listings in Shanghai and Shenzhen and the bulk of the remainder through H-share listings in Hong Kong. [Full Text]
In another article, the FT looks at this year’s domestic M&A deals in China:
Merger and acquisition activity in China continued to increase rapidly this year thanks to a sharp rise in domestic deals as mainland companies bought local rivals to expand.
The value of domestic M&A deals in China, including those in Hong Kong and Macao, in 2007 is up 53 per cent from last year to $50.6bn, according to a report by PwC. The volume of deals grew45 per cent to 987 transactions, twice as much as foreign-invested M&A deals. Domestic transactions are expected to continue to dominate deal activity next year. [Full Text]