Home Economy News Chinese companies axe IPO plans amid listing scrutiny

Chinese companies axe IPO plans amid listing scrutiny


Chinese companies axe IPO plans amid listing scrutiny By Reuters

Breaking News



Published Feb 26, 2024 04:13AM ET

© Reuters. FILE PHOTO: An investor watches a board showing stock information at a brokerage office in Beijing, China October 8, 2018. REUTERS/Jason Lee/File Photo

SHANGHAI/SINGAPORE (Reuters) – Companies have scrambled to scuttle plans for initial public offering in China this year as the securities watchdog tightens rules on share listings in a bearish market.

Forty-seven companies pulled their listing plans from China’s stock exchanges so far this year, compared with 29 withdrawals during the same period one year earlier, data from stock exchanges showed.

The cancellations come as the China Securities Regulatory Commission (CSRC), under new chairman Wu Qing, solicited regulatory opinions from market participants and fined a company for fraudulent listing, amid other measures to restore confidence as major indexes linger near five-year lows.

A CSRC official also said on Friday that share issuers will face heavy penalties for accounting fraud, and the watchdog will conduct more on-site inspections.

“Under high-pressure regulation, the number of IPO (initial public offering) withdrawals reached a new high,” securities broker Shenwan Hongyuan said in a note.

China’s new share sales, which once dominated the global IPO market going by proceeds, already slowed late last year when regulators started a phased restriction on IPOs to promote a “dynamic equilibrium” between investment and financing.

Some 313 companies completed IPOs in China last year, raising 356 billion yuan ($49.5 billion) in total, down from 424 IPOs and 587 billion yuan raised in 2022, according to Guotai Junan Securities.

Last week, the Shenzhen Stock Exchange terminated IPO plans of appliance maker Ningbo Borine Electric Appliance Co and diagnostics firm Fapon Biotech Inc, after the firms requested to withdraw their listing applications.

Early this month, the CSRC fined Shanghai-based semiconductor company S2C Ltd for fraud in its listing application, even though the firm’s IPO plan was cancelled in July 2022.

“This means that the regulators’ punishment of fraudulent issuances has been moved to the IPO review stage,” said Shenwan Hongyuan Securities.

“A-share IPOs will enter an era where quality is more important than quantity,” the brokerage said referring to shares listed on the Chinese mainland.

($1 = 7.1980 Chinese yuan)

Chinese companies axe IPO plans amid listing scrutiny

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning
Do not sell my personal information

© 2007-2024 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Related News