THE return of initial public offerings (IPOs) in China has been warmly welcomed by investors, who believe they are sure to make money from buying low-priced new shares.

    Four firms’ IPOs last week drew huge demand after a four-month hiatus on offerings, with auto parts maker Shanghai Lianming Machinery Co. attracting interest around 515 times the amount on offer in the online portion of its sale.

    The China Securities Regulatory Commission said June 9 that it would allow 10 companies to sell new shares to investors, marking the restart of China’s IPO market following a months-long halt in new listings.

    The first four firms of the 10 allowed to list raised a total of 1.8 billion yuan (US$290 million), according to statements from the firms published on the Shanghai and Shenzhen stock exchanges.

    The four firms received a combined 380 billion yuan in valid subscription orders from investors earlier last week, data from Wind Information showed, indicating that their shares were more than 200 times oversubscribed.

    Most of the unsuccessful bids will only be returned to the investors today, meaning the market will see a large inflow of money early this week which could help sentiment.

    The robust demand for cash used for new-share subscription has in recent days stirred the stock and bond markets.

    The benchmark Shanghai Composite Index fell 2 percent for the week, partly due to fund outflows, as many investors geared up to place orders. The benchmark weighted average of seven-day repurchase agreement rate was up at 3.49 percent from June 13’s close of 3.05 percent as traders borrowed money for new-share subscription. (SD-Agencies)