The Chinese stock market is at a turning point: after more than a year's halt, placements of new companies on the Stock Exchange will restart in January. It is to announce it the China Securities Regulatory Commission (CSRC), which specifies that there are already 50 companies ready to proceed on the listing process to get to negotiations by the end of next January.
To overcome the impasse – for more than a year, as mentioned, no freshman registered on the stock market – the Chinese authorities have prepared a new regulation for listing. However, it will take at least another year to clear the waiting list over 760 companies applying for listing approval.
This is a historic turning point for the Chinese market and, consequently, for the world market. In 2010, the Dragon was the largest IPO market globally, recording a record inflows of 71 billion. The latest operation in this sense, however, dates back to October 2012, when the CSRC itself imposed more stringent rules following the emergence of fraud and incorrect behavior between advisors and companies.
The easing is the result of a decision announced by the Communist Party last month, in what appears to be a decisive step towards a new era in the Asian economy: the rules on IPOs, in fact, will be accompanied provisions on competition and the free market.
The first comments of Chinese analysts were positive, who see multiple long-term benefits, linked to greater choice for companies and investors, but warn of short-term risks, when there could be downward pressure on the stock market.
Attachments: The Bloomberg article
