"It will be quite surprising to see many of more than six to eight H-shares come to the market (during the rest of) this year," said Richard Taylor, head of investment banking of CLSA Equity Capital Markets.

"On the basis that those will generally take several months before they are ready to come to the market, I doubt whether you will see many new H-shares coming to the market before the third quarter. Obviously there is limited opportunity," he added.Only two H-shares, Huaneng Power International Inc and Yanzhou Coal Mining Co Ltd, were listed in the first four months of 1998, raising HK$1.98 billion.

This compares with three H-shares listed during the same 1997 period. They raised about HK$7.42 billion.

A record 82 companies, raising HK$81.7 billion, were brought to themarket in 1997, substantially higher than the 49 new listings seen in 1996 which raised about HK$20.68 billion.Among the 82 new listings in 1997, 16 were H-shares -- which absorbed HK$32.04 billion -- and 11 were Hong Kong-based China-backed red chip companies, which raised HK$39.56 billion.

H-share and red chip listings together took up 88 per cent of the total capital raised by new listings in 1997.

John Mack, president and chief operating officer of Morgan Stanley Dean Witter, said H-share IPOs might increase if the market improves in the second half of this year."It all depends on the market, what happens in the market.

"Analysts said listing candidates were reluctant to price their shares at too low a level, but investment banks were demanding lower prices to rouse market interest. This would push some companies to delay their H-share listings, analysts said.

"Investment banks will be quite cautious and will be very careful in selecting suitable listing candidates, taking into consideration therisk in underwriting new issues in the current environment," said Raymond Jook, head of China research of SocGen-Crosby Securities.

But analysts said market sentiment could improve later this year after China details its economic reform policies. In the run up to US president Bill Clinton's June visit to China, investor focus was likely to shift back to China, they said.

"I think there will be much more of a focus on the China market at that time," said Taylor.

Improved sentiment should allow more H-share listings in the second half of the year than in the first half.

There are currently 41 H-shares listed on the Hong Kong stock exchange.

"Will the market be open for any H-shares to come to the market in the second half this year? I think the answer is no. But will the better quality ones be able to come? I think yes," Taylor said.

"There will be windows during that time when maybe six to eight deals can get up. And it has got to be the better and more interesting companies, much more selective,"he added.

China International Capital Corp Ltd (CICC), which led Hong Kong's largest ever initial public offering -- China Telecom (Hong Kong) Ltd -- last October, said it would be actively involved in the restructuring of China's state-owned sector, which includes the public listing of companies.

"Basically we are focusing on telecom, the energy sector, power sector," said Mack.