Shares in 10 Chinese companies soared almost 100% on average on Monday, as the first batch of initial public offerings under a new streamlined listings regime debuted in Shanghai and Shenzhen, reports the Financial Times. The top gainers among the new launches included Shenzhen CECport Technologies, an electronics distributor, whose shares ended trading up more than 220%, and Shaanxi Energy Investment, a state-owned electricity group that raised RMB 7.2 billion ($1.1 billion) from its IPO and whose stock rose about 48%. The average gain across the 10 new listings was more than 96%.
But financial experts said the massive price gains recorded by the new listings pointed to the need for more comprehensive reforms to China’s equity fundraising rules.
“The fact that you have these ridiculous jumps on Day One clearly means companies are being undersold,” said Fraser Howie, an independent analyst and expert on China’s financial system. “This is still a process where there is tremendous [state] oversight and control.”