[NEW YORK] China's initial public offerings are such hot commodities that a company seeking to raise US$2 billion attracted total bids for an amount almost equaling the entire annual economic output of Hong Kong.
China National Nuclear Power Co, the country's second- biggest atomic power operator, locked up 1.69 trillion yuan (US$273 billion) in bids for its IPO, according to a company statement posted on the Shanghai Stock Exchange's website.
Investors have been drawn to newly issued stocks traded in mainland China as they typically surge in initial trading, partly because regulators discourage companies from selling shares at high valuations.
The 144 firms that went public this year jumped by an average 539 per cent so far, including a 44 per cent increase on the first day of trading, according to data compiled by Bloomberg. China National Nuclear's US$2 billion offering would be the biggest since August 2010.
Under current regulations, the China Securities Regulatory Commission requires any firm pricing stock at levels above their peers to postpone the offering by three weeks and issue risk warnings to investors.
China National Nuclear will sell 3.9 billion new shares at 3.39 yuan each, according to its statement. The company plans to use the money to build 10 reactors and for working capital needs.
Subscriptions for 23 local IPOs including, China National Nuclear Power, may lock up 4.9 trillion yuan of liquidity starting early June, according to the median estimate of six analysts surveyed by Bloomberg last month.