Societe Generale's Chinese fund venture will temporarily suspend participation in initial public offerings in the country, a rare move by an institutional investor that highlights the recent high pricing of many mainland IPOs. Fortune SGAM Fund Management Co Ltd said in a statement on its website that intensive IPO launches recently made it impossible for fund managers to fully study issuers and give fair pricing.
"To improve investment and research efficiency, we have decided to suspend our participation in IPO bookbuilding and will refuse roadshow visits by issuers and underwriters," Shanghai-based Fortune SGAM said. Chinese investors are facing a sluggish stock market that has dropped to a 33-month low and have seen a slew of newly-listings falling below their IPO prices. For example, Pang Da Automobile Trade Co Ltd, which went public in April, trades at about 6.20 yuan, 86 percent lower than its IPO price of 45 yuan.
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