Shenzhen bourse nudges China firms to speed up IPO applications
The exchange is China’s second largest after Shanghai
[BEIJING] China’s Shenzhen Stock Exchange has urged brokers to speed up applications for companies to list on the ChiNext board as officials seek to boost private enterprise and reignite the economy under threat from rising tariffs.
The exchange, China’s second largest after Shanghai, called in a dozen investment banks to a meeting last month to get them to quicken the pace of applications for companies seeking to sell shares on the tech board, according to sources familiar with the matter.
At the meeting, the bourse indicated it would expedite the approval process and loosen some requirements, the sources said, asking not to be identified discussing private information. The regulator aims to ensure that all enterprises that have submitted applications can receive a review and feedback this year, the sources said.
After a years-long clampdown on share sales and tighter scrutiny of private enterprises, Beijing has shifted its stance as economic challenges, including a trade war, have mounted. Earlier this year, President Xi Jinping presided over a meeting with key entrepreneurs including Alibaba Group Holding co-founder Jack Ma, underscoring a softer stance.
At a forum last month, China Securities Regulatory Commission chairman Wu Qing said that China will accelerate the development of a capital market better suited to supporting technological innovation and more actively cultivate long-term capital for the market. Regulators are also seeking to stoke share sales on the mainland, as listings from Chinese firms have surged in Hong Kong.
The Shenzhen exchange late last month also published rules to make it easier for technology firms already listed on the ChiNext board to raise funds to improve their ability to innovate.
The exchange did not immediately respond to an emailed request for a comment.
China’s stock exchanges in Shanghai, Shenzhen and Beijing accepted 150 new applications for initial public offering (IPO) in June, the highest monthly tally this year. The majority was accepted by Beijing, according to exchange data. Listings in Hong Kong hit the highest since December 2022 last month, as a rally in the Asian financial hub’s stocks drove a rush for share sales.
Listings in China plunged for three straight years, reaching 222 billion yuan last year, down from 1.24 trillion yuan in 2021, according to data compiled by Bloomberg. So far this year, China has seen 114 billion yuan in listings. BLOOMBERG
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