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Saturday, 20 June 2009
China allows IPOs to resume after 9-month suspension
Regulators yesterday lifted a nine-month ban on Chinese initial public stock offerings after markets rebounded in recent months from the plunge that prompted the moratorium.
China allows IPOs to resume after 9-month suspension
20 June 009
Regulators yesterday lifted a nine-month ban on Chinese initial public stock offerings after markets rebounded in recent months from the plunge that prompted the moratorium.
A small drug maker, Guilin Sanjin Pharmaceutical Co, announced it will become the first IPO of 2009, debuting June 29 in Shenzhen, where the smaller of China’s two exchanges is located.
‘Now it is a good time for the regulator to lift the ban, since the benchmark has been up so much. The regulator seems to be eager to push this ahead,’ said Zhang Xiang, an analyst for Guodu Securities in Beijing.
The benchmark Shanghai Composite Index has surged 57 per cent since the start of the year, lifted by optimism over the government’s multibillion-dollar stimulus spending. It closed on Thursday at 2,853.9, its highest since last July 28.
Guilin Sanjin said in an announcement through the Shenzhen exchange that it will issue up to 46 million new shares to raise funds for projects requiring 634 million yuan (S$135 million) in total investment.
The decision to begin gradually with a smaller company reassured investors who worried that the first IPOs might be for big companies, which could depress prices by flooding the market with shares.
‘To start with the smaller companies showed the regulator’s determination to shore up the market, with a testing gesture first,’ said Wen Lijun, an analyst for Nanjing Securities.
China halted IPOs last September after the Shanghai index tumbled 60 per cent from its high the previous year. At that point, 37 companies had received regulatory approval for IPOs.
Yesterday, the news of more possible IPOs helped to lift the stock prices of Chinese brokerages in anticipation of more business.
Sinolink Securities Co climbed by the daily 10 per cent limit, while Northeast Securities Co surged 5.7 per cent.
The benchmark Shanghai Composite Index rose 26.59 points, or 0.9 per cent, to close at 2,880.49, ending the week up 5 per cent. -- AP
1 comment:
China allows IPOs to resume after 9-month suspension
20 June 009
Regulators yesterday lifted a nine-month ban on Chinese initial public stock offerings after markets rebounded in recent months from the plunge that prompted the moratorium.
A small drug maker, Guilin Sanjin Pharmaceutical Co, announced it will become the first IPO of 2009, debuting June 29 in Shenzhen, where the smaller of China’s two exchanges is located.
‘Now it is a good time for the regulator to lift the ban, since the benchmark has been up so much. The regulator seems to be eager to push this ahead,’ said Zhang Xiang, an analyst for Guodu Securities in Beijing.
The benchmark Shanghai Composite Index has surged 57 per cent since the start of the year, lifted by optimism over the government’s multibillion-dollar stimulus spending. It closed on Thursday at 2,853.9, its highest since last July 28.
Guilin Sanjin said in an announcement through the Shenzhen exchange that it will issue up to 46 million new shares to raise funds for projects requiring 634 million yuan (S$135 million) in total investment.
The decision to begin gradually with a smaller company reassured investors who worried that the first IPOs might be for big companies, which could depress prices by flooding the market with shares.
‘To start with the smaller companies showed the regulator’s determination to shore up the market, with a testing gesture first,’ said Wen Lijun, an analyst for Nanjing Securities.
China halted IPOs last September after the Shanghai index tumbled 60 per cent from its high the previous year. At that point, 37 companies had received regulatory approval for IPOs.
Yesterday, the news of more possible IPOs helped to lift the stock prices of Chinese brokerages in anticipation of more business.
Sinolink Securities Co climbed by the daily 10 per cent limit, while Northeast Securities Co surged 5.7 per cent.
The benchmark Shanghai Composite Index rose 26.59 points, or 0.9 per cent, to close at 2,880.49, ending the week up 5 per cent. -- AP
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