Qual­ity, quan­tity of IPOs rise on the back of re­forms

China Daily (Hong Kong) - - BUSINESS - By MENG FANBIN meng­fan­bin@chi­nadaily.com.cn

The num­ber of IPOs in the A-share mar­ket in the first half of this year surged 303 per­cent year-on-year to 246 on the back of re­forms, ac­cord­ing to Wind In­for­ma­tion data.

The 246 IPOs raised about 125.6 bil­lion yuan ($18.48 bil­lion) in all for their com­pa­nies, up 336 per­cent year-on-year.

This year’s IPOs first went through strict ex­am­i­na­tion of the com­pa­nies’ cre­den­tials and fi­nan­cials by the mar­ket reg­u­la­tors.

With the author­i­ties tight­en­ing reg­u­la­tions and lay­ing out clear pol­icy guide­lines on IPOs, delist­ing, re­fi­nanc­ing, merg­ers and ac­qui­si­tions, in­vestor con­fi­dence is high, mar­ket in­sid­ers said.

The Shang­hai Stock Ex­change ex­pects IPOs to raise 300 bil­lion yuan by this yearend, up 67 per­cent on-year.

Liu Shiyu, chair­man of the China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion, said in Fe­bru­ary that the new reg­is­tra­tion sys­tem should not be seen as overly ide­al­is­tic or mys­ti­fy­ing. “It’s im­por­tant to un­der­stand the sys­tem and en­sure only good-qual­ity com­pa­nies get to list their shares. We’ ll ... solve the IPO jam.”

He was re­fer­ring to the in­or­di­nate rise in the num­ber of firms ap­ply­ing for IPO ap­provals, which slowed down the sys­tem, caus­ing a pile-up.

Since Novem­ber 2016, how­ever, IPO ap­provals by the CSRC’s Is­suance Ex­am­i­na­tion Com­mis­sion have in­creased sig­nif­i­cantly to four batches per month, with each batch con­tain­ing 10 to 12 com­pa­nies.

IPO ap­provals are ex­pected to reach 500 this year, rais­ing hopes that if the rate of ap­provals is sus­tained, the back­log list would get short­ened in a year.

EY, the global pro­fes­sional ser­vices provider, ex­pects IPO ap­provals to slow a bit in the se­cond half of this year, al­though their over­all speed would be brisk.

This year so far, the IEC has ap­proved 246 IPOs, or 85 per­cent of the to­tal ap­pli­ca­tions re­ceived. It also re­jected 37 IPOs. Last year, 97 per­cent of IPO ap­pli­ca­tions were ap­proved.

Data on lat­est re­jec­tions show that the IEC is ac­cord­ing much weight to le­gal com­pli­ance of is­suers, and timely and ac­cu­rate dis­clo­sure of in­for­ma­tion.

Bro­ker­ages’ un­der­writ­ing fee surges

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