Chinese IPOs to hit record in Germany
BY Zhang Shidong 2011-09-23 19:57:21
A giant screen displays the movement of the benchmark DAX index at the Frankfurt Stock Exchange in Germany. [Photo/Agencies]
SHANGHAI - Chinese companies are holding IPOs in Germany at a record pace and Europe's debt crisis is unlikely to derail that trend, according to Deutsche Boerse AG, Europe's largest securities exchange.
"This year is already the best and we always hope to do better," Barbara Georg, head of listing and issuer services of the Frankfurt-based exchange, said in an interview at a Shanghai forum. "I don't think that will change much. Some Chinese IPOs are already in the pipeline."
Ten Chinese companies have listed on the exchange this year, Georg said, declining to say how many more are seeking to sell shares. Chinese companies benefit from "high liquidity, fair valuation and very favorable capital costs" in Germany, she said in a statement. There are 34 Chinese companies listed in Frankfurt, Georg said.
"The listing requirements in Europe are less stringent than other overseas markets such as the US, as they are trying to attract high-quality companies amid the current debt crisis," said Wei Wei, an analyst at West China Securities Co in Shanghai. "That's why we see a number of companies have gone to Europe for listing."
Powerland AG, a Chinese manufacturer of bags and travel cases, has plunged 35 percent since its listing in Frankfurt in April. Power equipment maker United Power Technology AG has fallen 34 percent since its debut in June.
European leaders are struggling to contain a sovereign debt crisis in the 17-nation region that started in Greece and is threatening to engulf Spain and Italy, which on Monday had its credit rating cut by Standard & Poor's. Germany's top credit rating was affirmed by Fitch Ratings on Tuesday after the government agreed on fiscal plans to reduce debt.
Germany's stock market has a capitalization of $1.23 trillion, according to data compiled by Bloomberg. China's market value is $3.63 trillion, the world's biggest after the US and Japan, the data showed.
Germany's benchmark DAX index is valued at 8.2 times estimated profit.
Chinese companies have raised 204 billion yuan ($32 billion) from domestic IPOs this year, according to Bloomberg data. They raised 488 billion yuan last year, the most annually since Bloomberg began tracking the data in 1999.
Deutsche Boerse is seeking to combine with NYSE Euronext to create the world's biggest exchange operator.