Investors demand to know how IPOs will be priced in the run-up to China’s new tech board launch
- Fund managers and retail investors say the public consultation documents contained no reference to IPO pricing
- Technically regulators will relinquish their roll in pricing IPO shares, but sources say they would still intervene initially to maintain market stability
Mainland Chinese equity investors were demanding to know how initial public offerings will be priced on Shanghai’s hotly-anticipated new technology board as a public consultation period drew to a close on Wednesday.
Fund managers and retail investors said they were still awaiting a clear-cut reply from financial watchdogs to the question of how new shares on the Technology Innovation Board will be priced. They said the public consultation documents contained no reference to IPO pricing.
Technically, under the rules governing the new board, the regulators will relinquish their roll in pricing IPO shares, allowing the market to decide their worth. But sources close to the regulators said they would still intervene in the pricing of the shares initially to maintain market stability.
“IPO has been an issue on the market for a long time, but it remains unclear whether the regulators want to drastically reform the mechanism on the new board,” said He Yan, a fund manager at Shanghai Shiva Investment. “A reasonable pricing of IPO shares will help the new board develop in a healthy manner.”
The China Securities Regulatory Commission (CSRC) and the Shanghai Stock Exchange published rules governing the operation of the board at the end of January and solicited public opinions until February 20.