China takes a gamble with IPO resumption

[SHANGHAI] China's plan to build confidence in domestic stock markets, and turn around their reputation as financial casinos, will depend on a regulatory gamble paying off next year.

Authorities have decided to lift a ban on new stock listings from as early as next month, wagering that a series of confidence-building measures announced recently will ensure healthy demand for the tide of new shares expected in 2014.

But if they are wrong, a flood of new listings could not only sink China's already-struggling bourses but also jeopardise a bigger reform goal: to ensure more money flows to where it is needed in the world's second-largest economy.

Early signs are not encouraging.

Chinese investors appear far from persuaded that their stock markets are on the threshold of a transformation into investment destinations that are worthy alternatives to bank deposits, property and other preferred homes for thei…