economy - Big, bigger, biggest: IPO's are in the air

Undeterred by stories on fraud, non-performing loans or other Chinese financial diseases a hausse in IPO will be hitting the financial markets in the coming months. A new financial China craze is in the making.
The expected US$ 7.2 billion worth listing of the China Construction Bank is going to be the largest, reports The Standard today. Both its size, with listings in Hong Kong, New York and Shanghai, and its industry, banking, makes this a tricky exercise. For a mainland company it will be a record listing.
In the past few months the CCB has tried to get rid of much of its non-performing loans, a whoppy US$ 22.5 billion for a severely discounted return, and has restructured its management. Because of the backing by the Chinese government, the listing will be rather safe, but in the long run it might be hard to keep all the skeletons on the closets that have not yet been opened.
The domestic IPO of the China Oriental Group got oversubscribed 700 times, the international one eleven times, indicating a favorable mood among investors regarding mainland companies, despite sometimes weak fundamentals. Tom.com is yet another, rather small, internet company that tries to catch the current upswing in the market. An upswing that is mostly followed by a wake-up call.