When a billion Chinese punt

7 May 2015 By John Foley Follow @johnsfoley

The 6 pct fall in Shanghai stocks in four days could be sobriety setting in. More likely it’s due to investors pulling out funds to bet on new offerings. Eye-popping levels of demand suggest speculation still burns bright. Yet if it saps broader prices, confidence may evaporate.

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Shanghai’s benchmark stock index fell 1.4 percent by midday on May 7, taking losses over the week to just over 6 percent. The Shanghai Composite is still double its value at the beginning of June 2014.

There were 23 companies that had priced initial public offerings on the Shenzhen and Shanghai markets as of May 7, according to Reuters data. Together they planned to raise 9.9 billion yuan ($1.6 billion) of capital.

China’s securities regulator announced on April 23 that it would start approving two batches of IPOs per month. Before, the China Securities Regulatory Commission used to publish one list each month.

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