As the stock market recovers from a $5 trillion rout, China will resume initial public offerings by the end of the year following a five-month freeze.
China Securities Regulatory Commission spokesperson Deng Ge said new share offerings will resume after improvements to the listing system. On Saturday, Chinese equity-index futures slid 0.9% at the close despite woes IPOs will divert funds from existing equities.
Although there will be short-term affliction to the sentiment in the market, the government needs to push through with the reform and “the timing for IPOs will be better now than next year,” said Ronald Wan, Chief Executive Officer at Partners Capital International.
Authorities control the timing and pricing of new listings, unlike in majority of stock markets. Nearly all of this year’s deals have been valuated at levels below 23 times earnings; while policymakers have vowed to loosen their hold on the process.
The material has been provided by InstaForex Company – www.instaforex.com