Xinhua Finance/Milken Institute China Indicator Update

Xinhua Finance/Milken Institute China Indicator Update

February 26, 2007

January IPO Indicator Shows First Drop Since July 2006

    SHANGHAI, China, Feb. 26 /Xinhua-PRNewswire/ --

    Indicator Value Change
     January 2007: 231.5
     December 2006: 237.8
     Month-to-month change: -2.66%
     January 2006: 156.8
     Year-to-year change: 47.6%

    Click
http://www.xinhuafinance.com/en/charts/ipo_rpi/0702_ipo.html
to download the chart.

    Highlights

    The IPO indicator dropped 2.66 percent in January 2007,
from 237.8 to 231.5.  Chinese IPOs this month raised a total
of $789 million.  Of the ten newly listed companies, nine
are small and medium enterprises listed on Shenzhen Stock
Exchange and one is listed on Shanghai Stock Exchange. 

    Analysis 

    For the first time since July 2006, the IPO indicator
dropped -- by 2.66 percent in January 2007.  Of the eighty
companies included in both this month's and last month's
indicator, six saw a decline in price, while seventy-four
saw an increase.  The Industrial and Commercial Bank of
China (ICBC) alone contributed 71 percent of the decrease
in the indicator's float-adjusted market capitalization,
while the Bank of China (BOC) contributed another 28
percent.  The A share price of ICBC dropped 20 percent in
the past month, and its H share price dropped approximately
6 percent, which is not uncommon after the initial sharp
run-up in price.  One company was deleted from the
indicator after staying for twelve months, and ten newly
listed companies were added.  The ten January IPOs were all
on the Shanghai and Shenzhen stock exchanges. 

    Methodology

    A stock's float-adjusted market capitalization over
time forms the basis for indicator calculations.  Stock
dividends, stock splits, special dividends, share
consolidations, repurchases, spin-offs, and combination
stock distributions may trigger adjustments to the
indicator values.  Only companies incorporated and
domiciled in mainland China that go public on the Shanghai,
Shenzhen, and Hong Kong stock exchanges are included. 

    Time Period Coverage and Frequency

    New companies are added to the indicator as soon as
they are listed, while current companies are removed after
twelve months.  The IPO Indicator has a base date of
December 31, 1997, when the indicator's value was set equal
to 100, and covers the period from December 31, 1991, to the
present.  Values are calculated on a monthly basis.  The
indicator for each month is released in the third week of
the following month. 

    Sources of Data

    The real-time and historical trading data used in the
construction of this indicator are provided by Bloomberg
and Xinhua Finance; underlying information used to
calculate the float ratio is obtained from a variety of
sources, including Xinhua Finance's subsidiary Mergent,
stock exchanges, regulators, and the companies themselves. 
Corporate actions are sourced from Xinhua Finance,
regulatory filings and news services.

    To view additional information, visit
http://www.xinhuafinance.com/indicators and
http://www.milkeninstitute.org/chinaindicators . 

    Xinhua Finance Limited is China's unchallenged leader
in financial information and media, and is listed on the
Mothers board of the Tokyo Stock Exchange (symbol: 9399)
(OTC ADRs: XHFNY).  Bridging China's financial markets and
the world, Xinhua Finance serves financial institutions,
corporations and re-distributors through four focused and
complementary service lines: Indices, Ratings, Financial
News and Investor Relations.  Founded in November 1999, the
Company is headquartered in Shanghai with 20 news bureaus
and offices in 19 locations across Asia, Australia, North
America and Europe.  For more information, please visit
http://www.xinhuafinance.com . 

    The Milken Institute is a nonprofit, independent
economic think tank whose mission is to improve the lives
and economic conditions of diverse populations around the
world by helping business and public policy leaders
identify and implement innovative ideas for creating
broad-based prosperity.  The Milken Institute has extensive
expertise in China and conducts ongoing research on China's
banking and capital markets. It is based in Santa Monica,
Calif.  For more information, please visit
http://www.milkeninstitute.org .

    Contact information:

    Xinhua Finance
     China
     Ms. Joy Tsang
     Tel:   [phone] or [phone]
     Email: [e-mail]

     Japan
     Mr. Jiong Sun
     Tel:   [phone]
     Email: [e-mail]

    Taylor Rafferty (Media contact for Xinhua Finance)
     Japan 
     Mr. James Hawrylak
     Tel:   [phone]
     Email: [e-mail]

     United States
     Ms. Ishviene Arora
     Tel:   [phone]
     Email: [e-mail]

     Europe
     Mr. John Dudzinsky
     Tel:   [phone]
     Email: [e-mail]

    Milken Institute
     Ms. Jennifer Manfre, Associate Director of
Communications
     Tel:   [phone]
     Email: [e-mail]


SOURCE  Xinhua Finance; Milken Institute