China beats US and Europe in IPO gains
Strong performance is a result of the securities regulator's efforts to protect small investors by tightening oversight of pricing of new shares
China's initial public offerings are vastly outperforming those in the United States and Europe so far this year - and investors can thank the country's regulators for much of the gains.
The 48 companies that completed listings this year have surged an average 54 per cent to date when adjusted for deal size, compared with a 9 per cent gain for 194 first-time sales outside China, data showed.
That performance owes much to efforts by China's securities regulator to protect small investors in an initial offering process that had been riddled with fraudulent practices.
Facing pressure from the watchdog, most companies that went public this year did so at below-average valuations as they rushed to raise money following a 15-month listing freeze.
The retail investors are the winners and the companies are the losers
"The current round of [listings] has the most administrative intervention in the history of China," said Ding Yuan, an accounting professor at the China Europe International Business School. "The securities regulator is burdened with the responsibility for price swings."
The resumption of stock sales in China helped push the value of listings in Asia-Pacific to US$17.7 billion so far this year, more than triple the amount raised last year.