Chinese mainland stocks have fallen nearly 5 percent in the past three days. However, the depressed market movement has not dampened initial public offerings. This week alone has seen six companies launch online subscriptions.

Initial public offerings have been frequent in the market since the beginning of this year. Thirty-five new stocks entered the market by January 27th. The total number of shares reached more than 2.7 billion, raising over 42 billion yuan. These figures are all record highs for January.

The average Price to Earning Ratio of these new stocks also reached a monthly record high of 66.87. The excessively high valuation has made these new stocks unpopular, now the prices of some of them are much lower than their IPO prices.

Analysts point out that high IPO prices have created valuation bubbles, and risks are on the increase in the market.

Meanwhile, stocks which were heavily invested by fund companies also plummeted. The average declining rate of the first 20 exceeded that of the Shanghai Composite Index.

Huang Xiangbin, Chief analyst, Cinda Securities, said, "The bad performances of these stocks are mainly due to the fluctuation of the stock index. In addition, fund companies are paying attention to the diversity of their investments. It is outdated to invest only in one stock. Fund companies are more likely to hold several unpopular stocks and managed to get profit."

China Merchants Bank, the most heavily invested stock by funds, has declined more than 10 percent this month, compared with 5.5 percent drop of the Shanghai Composite Index.

Source: www.cctv.com