A record number of companies are abandoning their attempts to give Nasdaq a list of China’s responses as regulators step up investigations into the technology business after Anti Group’s public removal of its 37 37 billion initial public offering.
A Financial Times analysis of statistics published by Shanghai’s Star Market, which was Started slowly In July 2019, records show that 76 companies suspended their IPO applications in March or more than doubled the previous month.
Inauguration of cancellations pushes Star’s total cancellation attempts to more than 180 in November, November, Beijing Draw the list of ants Due to concerns about the lending business, the number of canceled IPOs stands at just 12.
The cancellations could complicate China’s efforts to develop capital markets on its coast – a long-standing policy priority for Beijing that has become even more urgent with U.S. legislation passed in December that could force Chinese parties. List from Wall Street.
They also point to the U-turn of Chinese authorities, who were committed to the so-called registration-based system when launching Star with the personal support of President Xi Jinping.
Under the system, companies can quickly create a list on the Star until they submit the required financial statements to the China Securities Regulatory Commission. But experts say the CSRC is now getting back that promise.
“They [Market] There was a real push for reform – what is happening now is certainly not happening, “said Fraser Howe, a Chinese financial analyst and expert. Going. “
Investors in China say companies seeking to list former exchanges in the wake of Star Ont’s failed double IPO and Hong Kong, which will be the world’s largest, are facing stricter regulatory demands.
A person directly familiar with the CSRC’s implementation strategy said it was doing “two steps back after three steps forward”. They warned that Star’s IPO recession could last until the end of 2021.
A Shenzhen-based investment banker, whose firm has made several Star IPOs postponed by the CSRC this year, regulators are now asking pepper companies how to calculate specific business metrics. Executives must disclose all of their personal bank accounts and be prepared to explain any transaction larger than RMB 30,000 (4,600).
Network security solution provider Zhejiang Qizhi Technology withdrew its Star Market IPO application in March after receiving 27 questions from regulators on issues including pricing its fluctuations and whether it is too dependent on the top five clients for revenue.
“The regulator has become low-key these days,” the banker said, adding that the IPO review process has now become so long that bankers of many companies needed expanded teams. It “significantly increased inventory costs by requesting many companies to move away”.
The number of companies waiting to be listed in China now stands at about 2,300, according to East Money Information, a data provider in the market, a backlog that will take about four years to clear in 2020, based on the pace of the IPO.
Extensive scrutiny of IPOs has also raised official concerns that flooding the list could suck up liquidity in China’s stock market, which was Global Legguard This year.
Beijing’s priority choice for listing specific types of technology companies, such as strategically important regions – Especially semiconductor – Which listings will be approved for Star IPOs could be further narrowed, said Thomas Gatley, an analyst at Gavacal Dragonomics.
“They’ve seen that there’s less money available, and they really want to go to places that want it,” he said.