Despite the plunging stock market, the Chinese Securities Regulatory Commission (CSRC) is accelerating the review and approval process of Initial Public Offering (IPO) applicants, the Beijing Business Today reported Wednesday.
According to the newspaper, 13 companies have filed an application for an IPO approval to the Department of Public Offering Supervision of CSRC during the first 16 trading days in June. While in May only two companies filed such application and no companies were actually approved by the CSRC.
Also, the success rate for IPO applicants appeared higher in June, with 9 out of the 11 companies winning IPO approval this month.
"There were more companies planning to go public this year,” said Liu Yang, an analyst from China Securities Research Co., “but the weak stock market slowed them down.” Therefore the CSRC had to speed up the review and approval of IPO applicants.
Plus, applying for public listing costs much manpower, material resources and financial investments. “This directly affects a company’s financial performance”, Liu said. “So the applying companies are eager to start the IPO process as soon as possible to conduct financing.”
Given the turmoil in current stock market, many companies are very concerned about their business performances. As a result, “some companies are rushing because they want to go public when they can still meet the required conditions,” Liu noted.
However, all the approved IPOs are from Medium and Small Cap stocks so they won’t cause much pressure on the A shares, Huatai Securities analyst Zhou Lin told the newspaper.
For more details, please read the full story in Chinese
(http://www.bbtnews.com.cn/market/channel/political50127.shtml).
(China.org.cn by Yan Pei, June 25, 2008)
