New ADR: SouFun Holdings Limited

SouFun Holdings Limited started trading on the NYSE on September 22nd with the ticker symbol SFUN. SouFun operates a leading real-estate website in China. The company “provides marketing, listing and other value-added services and products for China’s fast-growing real estate and home furnishing and improvement sectors.”

The initial ADR price was set at $42.50 and 1 ADR equals 4 Class A ordinary shares.The total ADR offering value was about $143 M for about 3.3 million shares. On the day of listing the stock jumped 73% confirming the continuing investor appetite for all stocks related to China.

Last October another China real estate information services provided named China Real Estate Information (CRIC) was listed on the NASDAQ market.From a peak of over $16 the ADR reached as low as $8 before recovering to $11.10 now.

The Shanghai Composite Index is down by double digits this year.Speculation is rampant in the Chinese housing market despite the central government’s best efforts to crack down on speculators. Hence foreign investors need to be cautious before jumping into the China bandwagon especially IPOs stocks related to the real estate market.

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