China gives green light for seven IPOs amid market volatility

BEIJING - According to a statement on its website, the China Securities Regulatory Commission (CSRC) has approved three firms to list on the Shanghai Stock Exchange and four to launch IPOs in Shenzhen.

The China Daily reports that the first batch of this year’s IPOs will be applicable under a new bidding rule for share subscription, under which advance payment before the announcement of allotment results is no longer required and investors can pay for their subscription if they get the lot.

The CSRC announced last month that it will be cancelling the upfront payment requirement this year, following complaints that this was accelerating liquidity strain, causing a stock market plunge and lifting rates in China’s money market.

China Business News reports that the old rule was indirectly responsible for once freezing as much as RMB5.69 trillion for new share subscriptions during the peak time for IPOs in June 2015, when 25 companies raised only RMB41.4 billion.

The seven companies expect to raise approximately RMB4 billion in total, with offerings arranged before the Chinese New Year holiday in early February. www.webershandwick.cn (ATI).