China’s third-biggest brokerage, Guotai Junan Securities Co, has seen its shares jump 44 per cent today (June 26th) in Shanghai after it raised 30.1 billion yuan (£3 billion). This is the country’s largest initial public offering in five years, according to Reuters.
Shares in the company jumped to 28.38 yuan today, compared to their IPO price of 19.71 yuan.
The company told Reuters it plans to use the funds to expand the financial services it provides, improve its underwriting capabilities and broaden its asset management business.
The performance of the stock reflects the “herd mentality” of Chinese investors, Francis Lun, chief executive officer of Hong Kong brokerage Geo Securities, told CNBC. “That’s typical of Chinese markets. You have an issue and everybody jumps on it.”
These good results come as the Shanghai Composite Index tumbled 7.4 per cent to 4193.64 today, as a growing number of analysts warn that valuations have climbed too far.
The slide in Chinese shares is also blamed on fresh government moves to tighten rules for margin financing.
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