April 2007: 251.1
March 2007: 244.5
Month-to-month change: 2.7%
April 2006: 184.2
Year-to-year change: 36.3%
Highlights
The IPO indicator advanced in April, riding the wave of the broader Chinese stock market, which has continued its ascent despite warnings of a market bubble from various government officials. The IPO indicator registered 251.1 at the end of April, 6.6 points higher than the previous month's score of 244.5. Fourteen equities were added to the indicator. Among them was CITIC Bank (A share, 601998; H share, 0998), which raised a combined US$5.4 billion in its dual IPO on the A and H share markets, the largest IPO worldwide this year.
Analysis
Of the ninety-three stocks included in the April indicator, twenty-one declined in price, while seventy-two increased. Energy, commodity, and transportation stocks pushed the indicator value higher, accounting for eight of the ten equities with the largest increase in market cap this month. Daqin Railway (A share, 601006), China Merchants Energy (A share, 601872), and Datong Coal (A share, 601001) contributed to 62 percent of the increase in score. The A share and H share prices of Industrial and Commercial Bank of China (ICBC; A share, 601398; H share, 1398)) dropped 2.4 percent and 1.2 percent, respectively. Of all constituents, ICBC had the greatest negative contribution to market cap in April, due to its large capital base.
Methodology
A stock's float-adjusted market capitalization over time forms the basis for indicator calculations. Stock dividends, stock splits, special dividends, share consolidations, repurchases, spin-offs, and combination stock distributions may trigger adjustments to the indicator values. Only companies incorporated and domiciled in mainland China that go public on the Shanghai, Shenzhen, and Hong Kong stock exchanges are included. Companies are removed from the indicator after a period of twelve months.
Xinhua Finance/Milken Institute China Indicators
The Xinhua Finance/Milken Institute China Indicators are aimed at providing investors, analysts, and financial professionals deeper insight into China's money and capital markets. Five of the eight indicators have been launched since November 2006: the Renminbi Pressure Indicator, the Chinese IPO Indicator, the Market Adjusted Debt (MAD) Indicator, the Banking Strength Indicator (BSI), and the Adjusted Trade and Finance (ATF) Indicator. The remaining three indicators will be launched later this year.
Time Period Coverage and Frequency
New companies are added to the indicator as soon as they are listed, while current companies are removed after twelve months. The IPO Indicator has a base date of December 31, 1997, when the indicator's value was set equal to 100, and covers the period from December 31, 1991, to the present. Values are calculated on a monthly basis. The indicator for each month is released in the third week of the following month.
