IPO ap­provals start rolling in FACTBOX

China Daily (Canada) - - BUSINESS - By CAI XIAO caix­iao@chi­nadaily.com.cn

On the 11th floor of the Fukai Build­ing in Bei­jing’s Fi­nan­cial Street, rep­re­sen­ta­tives of se­cu­ri­ties firms are wait­ing for spe­cial doc­u­ments — writ­ten ap­provals from the China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion for new share is­sues.

At mid­night on Mon­day, the CSRC gave the good news to the rep­re­sen­ta­tives of five com­pa­nies out of 82 that had fin­ished the IPO re­view and ap­proval process. Another six com­pa­nies got their writ­ten ap­provals the next day.

Shanxi Coal and Chem­i­cal In­dus­try Group Co Ltd and Ne­way Valve (Suzhou) Co Ltd will go pub­lic on the main boards at the Shang­hai Stock Ex­change.

Three oth­ers, in­clud­ing Guang­dong Xin­bao Elec­tri­cal Ap­pli­ances Hold­ings Co Ltd, will list on the small and medium- sized en­ter­prises board at the Shen­zhen Stock Ex­change.

The re­mai n i n g six, in­clud­ing Chengdu Tian­bao Heavy In­dus­try Co Ltd, will raise funds on the ChiNext Board in Shen­zhen.

Sub­scrip­tions for all the is­sues be­gan on Jan 8. In all, 50 com­pa­nies will go pub­lic this month, ac­cord­ing to the CSRC.

Zhang Bo is from North­east Se­cu­ri­ties Co Ltd, lead un­der­writer for the IPO of Chengdu Tian­bao Heavy In­dus­try. Start­ing on Fri­day, his team will hold a three-day road­show for the com­pany in Bei­jing, Shang­hai and Shen­zhen.

“The first 50 IPOs will at­tract many in­vest­ment funds, be­cause the ap­pli­cants went through strict fi­nan­cial ver­i­fi­ca­tion by the reg­u­la­tor last year, and the share pric­ing is strictly reg­u­lated by the new rules,” Zhang told China Daily.

To con­trol prices, the new rules state that the is­suer and un­der­writer must can­cel the high­est of­fer price from in­vestors and 10 per­cent of the shares of­fered at that price.

Another rep­re­sen­ta­tive from a se­cu­ri­ties firm who de­clined to be iden­ti­fied told China Daily that one out­come of the new rules was that prospec­tive is­suers must be care­ful when they The China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion sus­pends IPOs The CSRC man­dates ver­i­fi­ca­tion of fi­nan­cial data for IPO ap­pli­cants The CSRC is­sues draft IPO rules for pub­lic com­ment The CSRC pub­lishes fi­nal ver­sion of new IPO rules and says that about 50 com­pa­nies will go pub­lic by the end of Jan­uary 2014 The CSRC says it will im­ple­ment State Coun­cil’s call for greater pro­tec­tion of small in­vestors in cap­i­tal mar­kets sub­mit IPO ap­pli­ca­tions. Ma­te­rial sent to the CSRC be­comes pub­lic im­me­di­ately.

“The mar­ket is a sig­nif­i­cant de­ter­mi­nant of a com­pany’s per­for­mance in the Chi­nese stock mar­ket,” he said.

The Rongda Weiye print shop, which spe­cial­izes in IPO ap­pli­ca­tions, saw or­ders start com­ing in as soon as the CSRC be­gan is­su­ing fi­nal ap­provals on Mon­day.

The CSI300 In­dex, which cov­ers the lead­ing Shang­hai and Shen­zhen A-share list­ings, fell 0.4 per­cent on Thurs­day, while the Shang­hai Com­pos­ite In­dex was down 0.3 per­cent at 2,109.38 points.

The ChiNe x t In­dex, track­ing China’s Nasdaqstyle board of growth en­ter­prises, rose 2.19 per­cent to 1,333 points.

Hong Hao, man­ag­ing di­rec­tor and chief strate­gist at BO­COM In­ter­na­tional Hold­ings Co Ltd, told China Daily that the com­pa­nies go­ing pub­lic on the ChiNext Board of­fer good growth prospects and have smaller fi­nanc­ing de­mand, so they’ll be pop­u­lar with in­vestors.

“They are pos­i­tive of peo­ple’s con­fi­dence in the ChiNext Board, which ex­plains to­day’s stock mar­ket de­clines,” said Hong, adding that the re­sump­tion of IPOs will di­vert cap­i­tal from the sec­ondary mar­ket. Liu Yip­ing con­trib­uted to this story.

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