First 10 companies debut on new GEM index | Shanghai Daily

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First 10 companies debut on new GEM index

THE first 10 companies to list on China's Nasdaq-style market plan to raise 6.68 billion yuan (US$977 million) in their share sales tomorrow, more than double their initial estimates.

Average share price of the companies will be 55 times their earnings in 2008, compared with an average price/earning ratio of 36 for other initial public offerings on the Chinese mainland so far this year.

"Investors will rush to subscribe new shares in these companies, so their opening prices are very likely to exceed reasonable ranges," said Zeng Lingbo, an analyst at China International Capital Co Ltd.

Zeng suggested investors should not buy overpriced company shares unless they showed strong growth potential.

Shenzhen Stock Exchange, which will host the Growth Enterprise Market, said today that it will suspend the start-up firms from trading in their debut session until 2:57pm, three minutes ahead of market close, if they move more than 80 percent in either direction.



 

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