China International Travel Service Corp (CITS) said on Tuesday it would launch a Shanghai stock initial public offering (IPO) this week that is worth about 1.7 billion yuan ($249 million) to fund expansion, including setting up new tourist agencies.
China Travel, the country’s top tourist agency, would start book-building on Wednesday to issue as many as 220 million A shares denominated in yuan, or up to 25 percent of its expanded capital after the IPO, it said in a prospectus published in the official Shanghai Securities News.
China’s stock regulator has pushed a slew of firms to launch IPOs since it resumed approvals in June after a 10-month ban. That comes amid a backdrop of a volatile share market, with the benchmark Shanghai Composite Index having rebounded 13 percent this month after a 22-percent slump in August, its second biggest monthly fall in 15 years.
In Case You Missed It
The index slumped in August after a 90-percent jump from the start of this year but has since been lifted by government market-friendly steps, mainly repeated official pledges to support the market.
But the push by the China Securities Regulatory Commission of more IPOs into the market despite the index’s volatility betrays the limit of the government’s support to the market, analysts said. Worries persist about an asset price bubble at a time when the world’s third largest economy has just started recovering.
subscribers.
