A-share IPOs to fall 45% to 120 this year
Print Edition
CHINA’S A-share market expects 120 initial public offerings this year, almost half the total in 2015, while the amount to be raised is set to fall by 50 percent from last year.
Of the 120 expected IPOs — a 45 percent tumble from last year — the Shanghai Stock Exchange is likely to have 45 new listings this year while 75 firms will list on the Shenzhen bourse, according to PricewaterhouseCoopers’ forecast.
The IPOs are expected to raise up to 80 billion yuan (US$12 billion), down 50 percent year on year, according to PwC.
The declines have been attributed to a delay in the long-awaited reform toward a registration-based IPO system amid a stock market volatility. The securities regulator has slowed approval to quell investor fears about an influx of new shares and has been cracking down on fraudulent practices by applicants.
At the current pace of approval, analysts estimated that it would take at least five years for all IPOs in the pipeline to go public. This has led cash-hungry firms to turn to other financing channels, including the over-the-counter market.
In the first half of 2016, funds raised through the National Equities Exchange and Quotations system, an OTC-style share transfer system, totaled 71.4 billion yuan, above the 28.8 billion yuan netted by IPOs on the Shanghai and Shenzhen stock exchanges.
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