CSRC 'determined' to pursue IPO reform
Updated: 2014-01-18 08:00
By Cai Xiao in Beijing and Gao Changxin in Shanghai (China Daily)
The nation's financial regulators will continue to pursue market-oriented reform for new share listings and conduct random inspections, including checks of underwriters' work, the China Securities Regulatory Commission said on Friday.
The commission made the statement amid industry concern that the process of IPO reform would be affected by the delay in the offering of Chinese drug maker Jiangsu Aosaikang Pharmaceutical Co Ltd.
So far, 51 companies' plans to go public have been approved. But since Dec 31, nine of those companies - including Aosaikang - have suspended their offerings for various reasons.
Aosaikang had announced plans to issue 55.466 million shares at 72.99 yuan ($12.07) per share, with 78.6 percent of the shares to be transferred from existing shareholders.
Zhang Xiaojun, a spokesman for the CSRC, said that proportion was "too high" and not in line with the purpose of an IPO.
"Aosaikang's IPO delay is good for protecting the interests of investors and achieving the goal of market-oriented reform of new share listings," said Zhang.
The CSRC conducted random checks this week on the issue and underwriting work of 44 institutions and 13 principal underwriters of IPOs.
"The commission will continue to do random checks to ensure the sound development of the Chinese stock market and the interests of investors," said an official of the CSRC, commenting anonymously.
Meanwhile, China's first post-reform IPO finished its first trading day on Friday with a 43.5 percent rally.
Neway Valve (Suzhou) Co Ltd issued 82.5 million shares at 17.66 yuan a share. Shares closed at 25.34 yuan.
"Neway's closing price on Friday was slightly higher than expected but it's still a reasonable level," said Zhang Qi, an analyst at Haitong Securities Co Ltd.
Cinda Securities Co Ltd published a report early on Friday saying a price of 16.77 to 21.3 yuan per share would be reasonable on the first trading day.
In comparison, Zhejiang Shibao Co Ltd, the last company to issue shares before IPOs were suspended in 2012, saw its shares skyrocket by 650 percent on the first trading day, which was Nov 2, 2012, in Shenzhen.