A story in the Chinese media provides ample and often spirited feedback from shareholders in ChiNext (GEM) Board listcos -- an assortment of angst which reveals just how slighted ordinary retail investors lacking in high-level guanxi with the companies in question feel about the new board’s activities.
ChiNext was established six months ago to not only prop up capital-hungry midcaps looking to catch a Nasdaq-like rise to respectability and wealth, but also to provide alternatives to the established A-share mainboards.
Early-onset euphoria was the reaction from investors, who quickly poured in en masse and gave many of the original 28 listcos triple digit P/E ratios.
Now the new capital raising platform’s membership has grown to 66 members, with more on the way.
But thanks to recent corrections and a rough going earlier this week, P//E ratios are back down from the stratosphere and cooler heads are prevailing.
However, the flurry of new IPOs over the past half year on ChiNext and the enthusiastic response to their listings at the outset has left some complaining that those getting in on the ground floor were given “midnight passes” on the eve of the firm going public.
Outrageous Fortune
SinaFinance collected several standout comments from its online readers, with the news portal careful to state that contributors’ views do not necessarily express those of the media group.
Most complain that the disparity between announced IPO offer prices and the on-the-ground reality come listing morning can only mean that groups or individuals with strong ties to the listing candidate were given “midnight passes,” and their catbird seats on the eve of the deal made it very difficult for garden variety retail investors to make a decent buck come market opening.
Here are some of the more telling finger-on-the-pulse-like contributions:
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Something must be done.
Well, something is being done, but burned buyers like these no doubt think it's too little too late, or too slow altogether.
Six of the 66 firms listed on ChiNext have already been banned from trading until further notice for alleged irregularities like those referred to above.
Only time will tell if regulators take grievances from ordinary investors to heart… or with a grain of salt.
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