Across The Border | China’s new third board booming, but IPO queue for the main market still backed up
Small companies thirsty for cash are flocking to list on the lightly controlled SME market, but turnover still remains worryingly low
China’s over-the-counter stock market is booming, with more companies than ever seeking positions in the lightly controlled platform.
But its flagging turnover and weak liquidity are still preventing the market from effectively alleviating, what remains the biggest problem for the country’s exchanges: a huge backlog of initial public offering (IPO) applications.
The number of companies listed on the Beijing-based National Equities Exchange and Quotations (NEEQ), effectively China’s capital market for start-ups, has surged by 156.68 per cent to 8,622 from the end of last August.
That compares with 2,914 companies listed on the Shanghai and Shenzhen stock exchange houses.
This year, companies have raised 78.2 billion yuan (US$11.8 billion) from share placements on the NEEQ, founded in 2012 and also known locally as the mew third board.
That compares with 120 companies listing on the A-share market since last November, which raised 66.97 billion yuan, when the regulator resumed approval of IPO applications after the stock rout in summer, according to data provider Wind.