Caixin Explains: Why newly listed Chinese stocks fall below their IPO prices
Investing in Chinese IPOs was once hailed as the safest of safe bets, with guaranteed huge returns to investors. The rationale was that the stock of a newly listed company would almost certainly rise well above its offer price, a pattern that held true in most cases for many years.
But this formula has not always led to success in recent times.
This year as of April 20, the share prices of 62 out of 107 companies that went public on the Chinese mainland dropped below the offer prices, with nearly half of the 62 stocks trading on Shanghai’s Nasdaq-style STAR Market, according to Caixin calculations.
Assisted reproduction /
Court ruling triggers debate on assisted reproductive rights of single women
A recent court ruling in favor of a widow who sued a hospital for refusing to perform a frozen embryo transfer reignited debate in China over whether it’s legally and ethically acceptable for a single woman to have children with assisted reproductive technology.
Chinese regulations stipulate that single women are not allowed to receive assisted reproductive treatments, including in vitro fertilization and embryo transfer, without further elaborating. This has led courts to handle cases differently involving widows, who are usually considered single but not in the same category as unmarried women.
FINANCE & ECONOMY
China is rolling out so-called low-carbon transition bonds to help companies become greener. Photo: VCG
China’s polluting industries allowed to issue bonds to fund low-carbon transition
China is launching a pilot program for companies to issue transition bonds that fund their green transformation efforts amid the country’s decarbonization drive.
Companies in eight sectors — electricity, construction materials, steelmaking, nonferrous metals, petrochemicals, chemicals, papermaking and civil aviation — can borrow money via bonds to help them shift to greener modes of operation, according to a notice published Monday by the National Association of Financial Market Institutional Investors (NAFMII), a self-regulatory body of China’s interbank bond market under the central bank.
Ant Group /
Ant Group unveils Singapore digital bank in regional push
Billionaire Jack Ma’s Ant Group Co. Ltd. launched its digital bank in Singapore as China’s largest online financial platform branches out of its home market amid regulatory headwinds.
ANEXT Bank will provide digital financial services to micro, small and medium-sized enterprises, particularly those with cross-border operations, it said Monday in a statement.
Chart of the Day: The potential trillion-yuan cost of regular Covid testing
Many regions in China have rolled out programs to give residents regular nucleic acid tests, also known as PCR tests. Yet while such initiatives can help identify local outbreaks of Covid-19 in the early stages and prevent large-scale lockdowns, the financial costs could be significant.
Regular testing programs are paid for by local governments and require residents to undertake PCR tests within mandated frequencies ranging from 48 hours to seven days. Time-stamped negative test results are used as passes that allow people to move freely around their localities. Those with outdated results may be barred from entering certain public places.
Quick hits /
Elliott Associates sues LME for $456 million in nickel debacle
BUSINESS & TECH
As of the end of 2021, Bilibili had more than 12,200 employees.
Chinese video platform Bilibili cuts jobs in three segments
Chinese video platform Bilibili started a round of job cuts in mid-May, targeting the gaming, livestreaming and commercialization business segments, employees told Caixin.
Bilibili didn’t respond to a Caixin request for comment. The company previously denied rumors of large-scale staff reductions, saying it was adjusting some businesses, resulting in personnel changes.
A former employee in the livestreaming segment who was cut in this round told Caixin that he was told the company is adjusting the business.
Another promising sign for lithium: rising leveraged bets on mining companies
Investors have been buying up shares of Chinese mainland-traded lithium mining companies with borrowed money over the past two weeks, with Tianqi Lithium Corp. topping a recent list of domestic stocks that have received the highest amount of leveraged bets.
Margin traders’ growing interest in mainland-traded lithium producers reflects expectations for strong demand for the raw material for electric-vehicle (EV) batteries just as some local Chinese governments get back to offering subsidies for EVs.
Quick hits /
‘Fake’ aluminum stocks show perils of China’s commodities funding
Buffett-backed BYD jumps ahead of Tesla in battery metal push
Tencent-backed firm G7 merges with Alibaba-backed E6
Tech Insider /
Bilibili slashes jobs, Didi surges on promising news
Long Read /
Archive Interview: Lee Hsien Loong on what Singapore can – and can’t – teach China
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