Caixin
Aug 11, 2020 07:45 PM
FINANCE

Investors Take Longshot to Subscribe for Registration-Based ChiNext IPOs

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What’s new: Investors are rushing to subscribe for new stocks offered under a registration-based IPO system on Shenzhen’s Nasdaq-style ChiNext board in the hope of large price jumps, but the chances of being able to buy the shares are extremely low.

The ChiNext board has adopted a registration-based IPO system to replace its previous approval-based one. Investors’ average chance of being able to get a piece of each of the seven registration-based offerings last week was about 0.017%, according to Caixin calculations.

The background: Chinese investors like buying new shares as there is a common expectation that their prices always jump in the first few days after they list. Since the start of 2019, a total of 98 new stocks have been listed on the ChiNext board, and their prices rose by an average of 96.8% in the first 10 days of trading.

Investors do not have to prepay money to subscribe for new shares, thus fueling speculation, multiple stock market specialists said.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Related: First Companies Get Nod for Registration-Based IPOs in Shenzhen

Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Marcus Ryder (marcusryder@caixin.com)

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