After an extremely weak first nine months, the Chinese IPO market is set to see the largest offering of the year, according to The Wall Street Journal.
In 2010, the domestic Chinese IPO market dramatically outpaced that of the U.S., with Hong Kong and Shanghai each seeing at least $30-billion-worth of deals compared to around $10 billion in New York. Through September 29 this year, New York has seen roughly $26 billion compared to less than $25 billion in Hong Kong and less than $10 billion in Shanghai.
The drop cannot be attributed to lack of interest, as tight lending markets in China have pushed many companies to attempt IPOs and some experts have suggested the China Securities Regulatory Commission scale back IPO approvals.
On Thursday, September 29, however, the regulatory agency granted approval to China Communications Construction Co. to conduct an offer in Shanghai that could raise as much as $3.1 billion. The company is already listed in Hong Kong, but the company hopes to raise money to pay off loans and begin new projects.
The market has proven unsteady in recent months, however, particularly as key sectors like manufacturing slowed down. Reuters reports that China saw another drop in manufacturing in September, the third decline in a row.