China securities regulator encourages small firms to list in Shanghai

The mainland's securities regulator has tipped the balance in favour of the Shanghai Stock Exchange as the mainland's premier financial bourse, encouraging small firms to list shares on it in a move reinforcing the city's efforts to transform itself into a global financial centre.

China Securities Regulatory Commission officials are privately lobbying initial public offering applicants to give priority to the Shanghai exchange as a listing venue, according to investment bankers.

The regulator hopes to evenly distribute listing resources to the Shanghai and Shenzhen exchanges after the smaller Shenzhen bourse outshined its bigger rival in terms of flotation numbers and fundraising since 2011.

The Shanghai exchange lobbied the CSRC for four years for approval to list small firms, but it was not until late March that the regulator decided to grant the Shanghai bourse its wish.

The CSRC said the efforts were aimed at giving exchange prospects freedom in deciding their listing venues.

Two sources close to the CSRC said the regulator aimed to bring the number of listing applicants in Shanghai to 300. More than 30 firms have changed their listing venues recently.

Twenty-two firms, including Zhoushan Port, announced plans to list on the mainland yesterday, boosting the number of potential stock market debutants after a two-month lull in new listings. This increases the total number of companies that announced their IPO plans in the past six days to at least 87, a trend that may worry some investors who fear a flood of new listings could pressure mainland share prices by reducing funds for existing stocks.