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Merchant D&G handbag s to raise capital through IPO
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Merchants to raise capital through IPOPublished: 16 Nov 2009 14:02:01 PSTBy Zhao Qian China Merchants Securities Company will start trading on the Shanghai Stock Exchange on Tuesday.Merchants Securities, one of the leading domestic brokerage firms, offered 360 million A shares with the issuing price of 31 yuan ($4.54) apiece during its subscription period.A total of 287 million shares will start trading today, with a price to earnings (P/E) ratio of 56.26, according to a statement from the Guangdong-based brokerage.Goldman Sachs Gaohua Securities and Swiss bank UBS are the IPO underwriters."Brokerages all need to go public by floating IPO shares so as to boost capital and expand," Li Daxiao, the director of Yingda Securities, said yesterday.The China Securities Regulatory Commission (CSRC) released regulations about IPOs for brokerages recently emphasizing competitiveness, rather than simply focusing on profitability."We need to modify the regulations to make the IPO process more standardized," an official from CSRC said before the release of the regulation."The CSRC will prefer to let the best brokerages get listed so as to decrease financial risks," Xiao Chaohu, an analyst of Everbright Securities, which raised 11 billion yuan ($1.61) in SSE in August, said yesterday.Only 10 brokerages including CITIC Securities and Everbright Securities have had IPOs so far.Several other brokerages, including Huatai Securities and Guosen Securities, are also considering IPOs.But analyst were concerned over the IPO’s high P/E ratio."The issuing price of China Merchants Securities is too high, but the investors are still interested," Li said.The average P/E ratio of China’s 10 listed brokerages is 45, according to data from Reuters.Although Merchant’s P/E ratio is somewhat out of that range, it is still lower than Everbright’s ratio of 59 earlier this year.Four brokerages including China Galaxy Securities made predictions that Merchant Securities’s share price on the first trading day will range between 29 ($4.25) and 52.31 yuan ($7.66).And there are also concerns that the shares will open below its IPO value, resulting in major losses for investors.However, Li of Yingda Securities said it is impossible, because historically speaking, investors can always earn a lot through investing in new shares. Explore the World, Understand China!Please log on http://www.gloaltimes.cn管理咨询 Waterproof socks Learn Business Chinese ahappydeal spam wow account 乳化机
