Bloomberg News

Societe Generale China Fund Management Venture Stops Buying IPOs

January 02, 2012

Dec. 30 (Bloomberg) -- Societe Generale SA’s joint venture fund in China has stopped investing in initial public offerings because of the high frequency of new share sales in the country.

“In order to increase our company’s investment and research efficiency, we decided to suspend our participation in IPO pricing inquiries and roadshows immediately,” Fortune SG Fund Management Co. said in a Dec. 28 statement posted on its website.

The Shanghai-based fund management company cannot complete thorough analysis on issuers and offer reasonable pricing comments because there are too many new share sales and the issuers come from diverse industry and geographic backgrounds, according to the statement.

Companies sold about $40 billion of shares in China this year, more than in any country other than the U.S., according to data compiled by Bloomberg. Shenzhen, the smaller of China’s two stock exchanges, is the busiest IPO market in the world by number of deals, with 234 new listings this year, the data show.

The 262 companies that listed their shares in China this year fell an average of 10.2 percent from their offer price, according to data compiled by Bloomberg.

--Editors: Mohammed Hadi, Andreea Papuc

To contact the reporters on this story: Stephanie Tong in Hong Kong at stong17@bloomberg.net; Fox Hu in Hong Kong at fhu7@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net


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