China resumed its love affair with IPOs last week after a four-month break, as investors piled into 10 new listings that promised the last easy windfall before rule changes make share allocations more competitive. The 10 firms raised a combined Rmb3.9bn (US$610m) after their institutional books were covered an average of 400 times, before clawback, and their retail books were more than 1,000 times subscribed. Mandatory pre-funding under current IPO rules meant that investors set aside more than Rmb2trn to subscribe for the shares. Mutual funds dominated the institutional books. Some fund managers saw this batch of IPOs, together with the further 18 offerings approved for this year, as the last chance to use their capital advantage to max out their allocations on underpriced offerings before the regulatory pre-funding requirement is removed next year.
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