Foreign companies may boost China IPOs: CS Founder

SHANGHAI (BestGrowthStock) – Initial public offerings (IPOs) in China next year could beat a booming 2010 if the government allows foreign companies to sell shares on its stock markets, an executive at Credit Suisse’s (CSGN.VX: ) Chinese joint venture said.

“Next year could be better than this year,” said Credit Suisse Founder Vice President Jason Guo.

“I think the IPO market could reach about 500 billion yuan ($74.93 billion) next year, and that’s based on the assumption that the international board will be launched next year,” said Guo, who heads Credit Suisse Founder’s equity capital markets division.

Guo said Chinese companies had raised about 400 billion yuan so far this year.

China is the world’s largest IPO market so far in 2010. In the third-quarter alone, Chinese companies had raised a combined $40.1 billion via IPOs, accounting for about 76 percent of the total IPO proceeds raised globally, corporate advisory firm Ernst & Young said.

China has said it will eventually allow foreign companies to sell shares on its stock markets as part of a broader plan to widen investment channels for the country’s growing yuan savings.

The government had initially hoped to launch the international board on the Shanghai Stock Exchange this year. However, complicated technical and cross-border governance issues delayed the plan.

Fang Xinghai, Director-General of the Shanghai Financial Services Office, told Reuters on September12 that it was unclear when the government will start letting foreign companies sell shares in Shanghai.

At least two dozen foreign companies, including HSBC (HSBA.L: )(0005.HK: ), which this year moved its global CEO to Hong Kong from London, have expressed an interest in seeking a listing on the Shanghai Stock Exchange.

Chinese companies, such as China Mobile (0941.HK: ) and CNOOC (0883.HK: ), which are currently listed on the Hong Kong Stock Exchange, had also said they would consider to return to the mainland stock markets via the international board.

Although they are controlled by the Chinese, China Mobile and CNOOC are not allowed to sell shares on the yuan-denominated A-share markets in Shanghai and Shenzhen as they are incorporated in a foreign country.

Guo of Credit Suisse Founder also said that he expects China’s IPO market to get another boost from bank IPOs in the next two years.

Smaller city lenders which need to restructure their shareholdings before they can sell shares to the public will be ready to hit the market in the next two years, said Guo.

Shanghai Bank, Hangzhou Bank and Chongqing Bank are among city lenders that have said they want to raise fresh capital via an IPO.

(Reporting by Soo Ai Peng; Editing by Erica Billingham)

Foreign companies may boost China IPOs: CS Founder