CSRC publishes list of IPO hopefuls for first time

PUBLISHED : Friday, 03 February, 2012, 12:00am
UPDATED : Friday, 03 February, 2012, 12:00am


Beijing has for the first time released the names of 515 companies seeking approval for initial public offerings, in an effort to make the system more transparent.

The list was published on the website of the market watchdog, the China Securities Regulatory Commission (CSRC) and will be updated weekly. Commission chairman Guo Shuqing, who took up his post late last year, has vowed to protect investors' interests by improving the existing system.

A flood of high-priced new share offerings have been blamed for sharp market downturns in the past two years as they drained liquidity from listed stocks.

Millions of mainland investors had expected Guo to slow the rate of approvals to bolster the weak market.

The top regulator said the commission planned to fine-tune the existing offering mechanism to ensure that only quality firms raised funds at a reasonable price.

Currently, listing hopefuls set prices through offline subscriptions available only to institutional and corporate investors.

The elevated prices mean companies can raise huge amounts of funds, but they also soak up money from existing holdings that are sold to pay for the new shares.

Guo did not elaborate on how the pricing process would be regulated.

Analysts said Guo was trying to avoid frothy new share offerings in order to limit the total amount of funds they fetch.

'He looks determined to reform the IPO system because he wants to live up to the promise of protecting investors,' Haitong Securities analyst Zhang Qi said. '[But] it doesn't seem that the total number of IPOs will be cut this year.'

The mainland has been the world's largest market for offerings in the past two years.

Last year, 265 offerings raised 270 billion yuan (HK$332.4 billion) from the embattled Shanghai and Shenzhen stock exchanges after a record 349 listings collected a combined 478.3 billion yuan in 2010.

The CSRC's listings review committee rejected a quarter of last year's applications.

Based on the current 515 applicants, at least 400 companies may find a home on the Shanghai and Shenzhen stock exchanges this year.

'The regulator's move to make the number public is of little help to allay investors' concerns about an equity influx,' Essence Securities analyst Liu Jun said. 'At least, the public information represents an effort to make the system transparent.'

Among the applicants, Zhonghai Trust is expected to become the first mainland trust firm to list in 18 years.

City commercial banks such as Bank of Shanghai are also looking to raise funds to replenish their capital.

A total 295 companies applied to list on the Shanghai exchange or the SME board of the Shenzhen bourse while 220 start-ups hope to sell shares on the Nasdaq-like ChiNext board.


The number of city commercial banks on the list seeking an initial public offering

- Shanghai market fell 22 per cent last year