China may slow down approvals for IPOs amid declining investor interest

An investor stands at a trading terminal in front of an electronic stock board at a securities brokerage in Shanghai, China, on Friday, June 9, 2017. The Shanghai Composite Index rose 0.1 percent to extend a weekly gain to 1.5 percent. Photographer: Qilai Shen/Bloomberg

China moved to calm market concerns about recent heavy equity issuance amid signs investors are losing interest.

The country’s stock watchdog won’t adopt a “Great Leap Forward” approach to intensively grant approvals for initial public offerings, the China Securities Journal said Sunday, citing a source close to the regulator, the China Securities Regulatory Commission. The report added the agency will approve future proposed IPOs at a “steady” pace and according to market conditions.

Several other state media outlets echoed the report on Monday, including the Shanghai Securities News and Securities Times. They mentioned the CSRC will look to limit risks in the IPO market.

The published comments follow a flurry of recent IPOs that have seen quick price pullbacks on the stock market. Investor demand to participate has also cooled, with the country’s biggest stock listing since 2010 drawing the smallest oversubscription rate from retail investors for a Chinese IPO in almost half a decade.

“The media reports show the regulator aims to strike a balance between deepening reforms and the affordability of the secondary market,” said Fu Lichun, analyst at Northeast Securities Co. The stories, he added, hint that the CSRC “will pay more attention to controlling risks associated with IPOs and may put stricter requirements on the quality of listing candidates.”

As of Friday, 174 companies went public in China this year, raising a combined 202.7 billion yuan ($29 billion), according to data compiled by Bloomberg. That’s nearly 50% above 2018’s total. More than 50 of the listings have been on the new tech-focused Star market in Shanghai.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.