Investors shunning stocks could upset the biggest China IPO in years

BEIJING: What’s poised to be China’s biggest listing since 2015 faces a headwind: investors are losing interest in mainland stocks.

State-owned lender Postal Savings Bank of China Co is looking to raise around 28.4 billion yuan (Us$4bil) in what would be the largest onshore share sale since 2015.

It follows a flurry of initial public offerings that have faded quickly, amid slumping trading activity and a steady decline in new stock accounts that signals a lack of exuberance in China’s market.

It contrasts with the start of the year when turnover surged beyond one trillion yuan for the first time in years and multiple gauges roared into bull markets.

Such confidence has since been eroded by the twists and turns of Us-china trade negotiations, a slowing economy and weakness in corporate earnings.

Lacklustre debuts on Shanghai’s new Star market haven’t helped, with the board losing its shine amid a flood of issuance.

Of the 37 stocks listed in the A-share market since Oct 29, seven have dropped below their IPO price, according to data compiled by Bloomberg.

“Investors are leaving the stock market, because the market is lacking in money-making opportunities,” said Jiang Liangqing, a money manager at Ruisen Capital Management in Beijing. “It has become more common for new listings to flop.”

Turnover on mainland exchanges was down 74% from March’s high as of yesterday.

The Shanghai Composite hasn’t moved by more than 2% since August, while 30-day volatility is at its lowest since early 2018. The number of new stock trading accounts dropped 18% in October from September, the third monthly decline in a row.