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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerThe Shanghai Composite is up 210% during the last year. Obviously, it is not a bad place for a company to list its stock. All the shares have to do is keep up with the index and everyone should be happy.
China's second largest bank, China Construction Bank, sees things that way. It will list on the Shanghai Stock Exchange, perhaps as early as this month. The financial company wants to raise $7.8 billion.
The bank already trades in Hong Kong, but "of the 44 shares that are listed on both the mainland and Hong Kong, the Shanghai shares trade at 46% premium to their Hong Kong counterparts," according to a report on MarketWatch. That does not make much sense, but its is certainly an incentive for Chinese stocks listed on the Hong Kong Hang Seng to list in Shanghai as well.
At some point IPOs of this size may be a challenge in China. The liquidity may not be there to fund them. But, right now, that days seems a long way off.
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