Monday May 25, 07:06 AM
China to resume IPOs as early as next month: govt
SHANGHAI (AFP) - China said it would resume new stock market listings as early as next month, a move that reflects the strong performance of domestic shares this year, the country's securities regulator said.
New flotations will get the green light after June 5, once new draft rules for initial public offerings, or IPOs, are finalised, the China Securities Regulatory Commission (CSRC) said in a statement released at the weekend.
The draft rules aim to improve the system for companies seeking to list and will "diminish administrative guidance in setting IPO prices" and "establish a market-oriented price-setting mechanism", the statement said.
Investors will also be allowed to use both online and offline subscription systems, the statement said, in a bid to ensure retail investors have a fair chance of subscribing.
Under the old regulations, only institutional investors could subscribe via both systems, while retail investors had to use the online system.
The regulator said it would seek public input on the rules, and will "closely monitor market feedback and manage the pace of IPO reform".
The CSRC effectively halted IPOs in September amid worries that pressure on liquidity would worsen the already ailing domestic stock markets. The key index plummeted 65.5 percent last year on the back of the global financial crisis.
But it has rebounded more than 40 percent since the beginning of 2009 to become one of the world's best performing markets.
"By daring to issue the draft IPO rules, that may indicate the regulator is comfortable with the current market," Huatai Securities' analyst Chen Jinren told Dow Jones Newswires.
However, the market was down 1.23 percent by midday Monday on concerns of a share glut following the IPO announcement.
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