Investment banks file balance sheets of listing candidates with regulator to beat rush The recent rebound in the A-share market has heightened hopes for the resumption of initial public offerings, with investment banks rushing to file relevant documents and fund managers paring holdings in anticipation of an equity oversupply. The mainland's key investment banks are wasting no time in filing 2008 balance sheets of listing candidates with the China Securities Regulatory Commission to secure 'early bird' rankings when the regulator resumes new share flotations, according to sources. Underwriters and fund managers are betting the CSRC will soon resume vetting listing applications after a five-month hiatus since an about 20 per cent rise in benchmark stock indices from their lows in November last year. As an influx of speculative capital kept powering an upsurge in mainland stocks, the timing was right for Beijing to reopen the equity exchanges for cash-hungry companies, the sources said. The Shanghai Composite Index completed a five-week winning streak, ending at 2,320.792 points on Friday, up 27.46 per cent from the end of last year. 'Investment banks are speeding up their submissions to the regulator,' said Hou Liangzhi, a managing director of investment banking at Everbright Securities. 'If we waste time now, we might miss the train when the [offering] market reopens.' Hundreds of companies lined up to launch initial share offers last year, but the CSRC suspended its review process in September to curb an equity influx into the market. Underwriters and sponsors of new issues took a heavy beating as a result and are now vying for a share of underwriting business on the main and secondary boards once the market for share offers reopens this year. A CSRC spokesman declined to comment on whether the market would reopen soon, noting that investment banks were required to file applications under existing rules. The economic slowdown hit corporate earnings last year and firms that reported losses would not be eligible for flotations. Under listing rules, mainland firms must report profits for three consecutive years to qualify for share listings. Fund managers said they had started to realign portfolios amid signs the CSRC would resume new share offers soon to take advantage of the recent market rally. 'We have dumped a lot of shares because it is obvious a flood of offerings is imminent,' a Shanghai fund manager said. 'Sooner or later, a market correction will occur.' In September last year, the CSRC said it would control the flow of new share issues in tandem with market conditions. Though state-backed media supported the current rally, claiming the market gain would be supported by a recovery of the mainland economy, fund managers said room for further growth was limited as last month's falling exports weighed on the market outlook. China's overseas shipments fell an annualised 17.5 per cent last month amid weak foreign demand. A consensus prediction is that the Shanghai indicator would meet technical resistance at 2,500 points. Market sources now expected the regulator to be more stringent in its listing reviews to sift quality firms from among the candidates. Beijing is set to begin the long-heralded growth enterprise market on the Shenzhen Stock Exchange in the second quarter of this year to help prospective start-ups raise funds. Nearly 1,000 small companies are reportedly lining up to offer shares on the Nasdaq-style market.