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China's largest memory chipmaker, CXMT, is readying for a stock market debut described as blockbuster in scale. The fear building around it has little to do with the company itself.
The concern is about where the money to fund a listing of that magnitude comes from. The crowding-out concern The risk is mechanical.
A listing large enough to carry the blockbuster label does not absorb capital in a vacuum. It competes directly with every stock already trading on China's exchanges for a finite pool of investor money.
When a new issue commands that level of attention, cash tends to concentrate in the listing rather than circulate through the broader market.
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