FISH-THAT-DIDN'T-GET-AWAY.jpg[UPDATED]At
last, some respite from the flood of little-known Chinese companies
listing on foreign exchanges. New regulations designed to cool FDI into
China are also making it more difficult for China's small fry to raise capital overseas, says the Financial Times ($).

The
'paper quotes a recent poll of Chinese businesses by London Asia, the
UK-based investment bank, which finds that many smaller Chinese
businesses that were actively considering an overseas listing are now
having second thoughts.

They believe the new regulation, called
“Ordinance 10” will increase the difficulty, cost and time required for
an overseas listing.

The obvious alternative, a domestic
listing, is equally problematic. There is a backlog of applications for
domestic listings and, according to the FT, China's domestic
markets are more interested in welcoming “big brand-name companies”,
such as Industrial and Commercial Bank of China whose mammoth $19bn flotation, in Hong Kong and Shanghai, is due later this month.

Besides,
many of China's small fry look to a foreign listing to help improve
access to foreign markets and technology, not just to raise capital.

Cynics
might say they also want to list in the west to access a more gullible
investor base. Many private investors in the west seem prepared to
blindly invest in any stock as long as the word “China” features
heavily in its business plan or, even better, in its name — see, for
example, our recent stories on China Wonder, GMO and Bodisen Biotech.

MarketWatch has an interesting story questioning the “biotech” credentials and other aspects of Bodisen Biotech. The financial site also casts a critical eye over New York Global Group,
the NY-based investment bank that has helped Bodisen and other small
China plays get a US listing, often through a reverse merger into a
shell company.

At least 24 Chinese companies have listed on US markets since 2004. Some such as Baidu, the search engine company, and Suntech Power,
a maker of photovoltaic cells, have been highly successful china plays
— Baidu's share price is up more than 200% on its offer price.

Others
have struggled to find buyers once the initial enthusiasm wanes for the
latest China play wanes. China Grentech, a maker ofwireless kit, listed
in March at $18 but its share price is now languishing at $11.41.

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