THE first two companies set to list their shares in Shenzhen after the end of a regulatory freeze said they had attracted strong investor interest, a good sign for dozens more that plan to follow this month.

    Guangdong Xinbao Electrical Appliances Holdings Co. said Friday that it had raised 798 million yuan (US$131.9 million) from individual and institutional investors.

    The online part of the sale, which targeted mainly retail investors, attracted interest amounting to about 95 times the amount on offer, it said.

    Zhejiang Wolwo Bio-Pharmaceutical Co. said it raised 506 million yuan, with the online portion of the sale 176 times oversubscribed.

    China’s securities regulator signalled in December it would permit initial public offerings (IPOs) again after freezing new listings in November 2012. Chinese stock indices have slid steadily since then, however, and many analysts say a flood of new issues will increase pressure on stock prices.

    The government appeared to address that concern Wednesday as domestic media reported that domestic insurers would be allowed to buy shares on the small-cap ChiNext board in Shenzhen, where many of the new IPOs will take place.

    Regulators also recently encouraged State-owned firms to buy back their own shares, which could offset the dilutive effect of new listings.

    The two companies are the first of 29 that have already announced plans for initial public offerings on the Shenzhen and Shanghai exchange websites. More than 700 companies have queued for regulatory approval to list.

    Ernst & Young has estimated that new listings could raise as much as 200 billion yuan in 2014, more than twice what was raised in 2012 before the freeze. (SD-Agencies)