China’s stock market ended 2020 on a high note, with a key benchmark up 27% and at a multiyear high, reflecting the country’s economic revival during the coronavirus pandemic.
After the European Union and China agreed on terms of an investment accord, the CSI 300 Index—which tracks the top 300 stocks traded on exchanges in Shanghai and Shenzhen—rose 1.9% Thursday to reach its highest level since June 2015. The mainland benchmark registered a 27% gain for the year, while the Shanghai Composite Index ended 2020 up 14% at a nearly three-year closing high.
For 2021, investors and bankers expect China will continue to benefit from low global interest rates, and the huge amounts of funds sloshing around the world’s financial system, as well as the country’s rapid post-pandemic rebound. In October, the International Monetary Fund forecast Chinese GDP will jump 8.2% in 2021, following an estimated 1.9% increase in 2020.
Magnus Andersson, regional co-head of equity capital markets at
said international investors are “starved for growth” and so are keen on buying into good Chinese companies that are expanding quickly. “There’s a long queue of very high-quality companies with real growth and exciting stories lining up to come to the market,” Mr. Andersson said.
The Big Leagues
Largest Chinese listings of 2020
Beijing-Shanghai
High Speed
Railway
Likely initial public offerings in the near future include video-clip and live-streaming group Kuaishou Technology, and carpool and ride-hailing firm Dida Inc. Both have filed listing documents in Hong Kong already. Dida competes with Didi Chuxing, China’s pre-eminent taxi-app company.
Other potential candidates include JD Logistics, a unit of e-commerce firm
JD.com Inc.,
and Douyin, the Chinese sister to TikTok, which is owned by ByteDance Ltd., according to bankers and to media reports. JD Logistics and ByteDance both declined to comment.
Aaron Arth, head of the financing group in Asia ex-Japan at
said Chinese technology, health-care and consumer companies would remain some of the region’s most important issuers of equity. “2021 is shaping up to be as busy, if not a busier year, than 2020,” he said.
In the year to Dec. 30, Chinese companies have sold more than $279 billion of stock, up 72% compared with 2019, according to Dealogic. That tally includes…
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