China approves $6.3 billion construction IPO

(Agencies)
Updated: 2009-07-11 17:50

BEIJING: A construction company has received approval for China's biggest initial public stock offering this year and hopes to raise 42.6 billion yuan ($6.3 billion), a state newspaper reported Saturday.

China State Construction Engineering Corp., the country's biggest builder of housing, will be the fifth company to debut in the market since regulators in June lifted a nine-month-old moratorium on IPOs.

Government-owned China State Construction plans to issue 12 billion shares, the China Securities Journal reported.

Regulators banned new IPOs in September amid a plunge in share prices. The move was an effort to reassure investors that a flood of new shares entering the market would not push down prices further. The moratorium was lifted in June after a surge in stock prices amid massive government stimulus spending helped to restore investor confidence.

China State Construction's showcase projects include the "Water Cube" swimming center for the Beijing Olympics, the futuristic state TV headquarters and China's tallest skyscraper, the 1,614-foot-tall (492-meter-tall) Shanghai World Financial Center.

The company said last year it received approval for an IPO before the moratorium.

The first company to sell shares since the end of the moratorium received an enthusiastic response from investors. Guilin Sanjin Pharmaceutical Co., a small drug manufacturer, said its retail offering was 584 times subscribed.

China's benchmark Shanghai Composite Index closed Friday at 3113.93 after hitting a 13-month high of 3,124.67 on Monday.