Posted on 01/01/2002 12:09:09 PM PST by super175
Mainland companies raised 119.2 billion yuan (about HK$113 billion) from domestic stock markets last year, down about 22.72 per cent from 2000.
About 95.74 billion yuan was raised from the Shanghai stock market - a 4.08 per cent increase - and 23.47 billion yuan was tapped from Shenzhen, a far cry from 2000's 62.89 billion yuan.
Plans that will potentially make Shanghai the main board and Shenzhen the home for the second board for high-technology start-ups helped explain the latter's sharp fall in funds raised.
Almost all new listings last year, which totalled 74, took place in Shanghai.
Additional share offers also accounted for a big share of the money raised last year, according to China Securities.
The global stock market slump following the burst of the dotcom bubble and the subsequent economic slowdown, exacerbated by the September 11 attacks on the United States, have affected mainland investor confidence.
Shanghai's benchmark composite index lost 20.62 per cent last year, while 30.03 per cent was wiped off Shenzhen's.
A key factor drawing investors away, however, was the revelation of high-level scandals and rampant corruption - from price manipulation to falsifying financial data and disguised restructurings.
Investors were apparently spooked by the severity of the dishonesty in the stock markets.
They were also frustrated by the seeming helplessness of the market regulator, the China Securities Regulatory Commission, to stamp out the problems.
Beijing's move to sell state shares through the stock market to aid the underfunded pension system was another overhang.
The extent of firms' haemorrhaging was also worrying.
At the end of last year, there were 15 companies with three consecutive years of losses and 44 with two years of losses.
An eventful year also saw the commission finally showing its teeth to violators. Probes were launched and regulatory action followed.
At the same time, internationally recognised compliance standards have been set up in reporting results, disclosure and restructurings.
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