An investor in Fuzhou, Fujian province, stares at the stock information billboard. [China Daily]

Activity in initial public offerings has fallen to a three-year low in China, according to a report released by market researcher Zero2IPO Group.

The amount of money raised by Chinese companies in the first 11 months of the year through IPOs fell 70 percent over last year to $21.8 billion, the report said.

The number of IPOs and total capital raised also touched three-year lows, falling 44.3 percent and 75.3 percent respectively year-on-year.

Zero2IPO said 113 Chinese companies were listed in domestic or overseas markets from January to November, with average raised capital of $193 million each.

In overseas markets, the number of Chinese IPOs dropped from 98 a year ago to 37 in the first 11 months, with capital raised falling 46.4 percent to $6.922 billion.

In the domestic market, the number of IPOs fell by 27.6 percent to 76 in the period, with capital raised dropping about 72.6 percent to $14.91 billion.

Zero2IPO CEO Ni Zhengdong had warned in November that both entrepreneurs and investors could be entering a tough period.

"Without doubt, it will be a tough year in 2009," said Wu Shangzhi, partner, CDH Investment, a major domestic private equity firm.

Investors' enthusiasm about the hi-tech industry seems to have been dented, the report found.

In the first 11 months, the information technology industry attracted less than 40 percent of the total VC and PE investments into the country.

"Overseas investors now favor Chinese companies that are engaged in solar energy, bio-tech and companies with self-owned intellectual property rights, as well as the ones with established sales networks," said Ding Gongmin, chief representative of Europe Finance and Industry (EFI), a French investment bank.

"With investors becoming more cautious, it takes six months on average to clinch a deal compared with two months earlier," he said.