China ends yearlong ban on IPOs, issues new rules
(Bloomberg)
Updated: 2006-05-18 08:32 China ended a yearlong ban on
initial public offerings today, allowing companies to submit applications for
share sales to the securities regulator.
The China Securities Regulatory Commission issued new rules on initial share
sales on its Web site today, after a government program to trade more than $200
billion of mostly state-owned stockholdings was implemented without causing a
market slump.
China halted share sales in May last year to prevent a flood of equity as
companies converted non-tradable, mostly government holdings into common stock.
Industrial & Commercial Bank of China and Air China Ltd. are among the
nation's biggest companies that plan to sell domestic shares once the ban is
lifted, tapping $1.9 trillion of household savings.
"It's the natural next step," said Geoff Lewis, head of investment services
at JF Asset Management Ltd. in Hong Kong, which holds about $73 billion in Asian
assets. "It's a testimony to the success of their policy. That's what the A
share market is there for, to raise money," he said before the announcement.
Ending the ban may lure some of the $1.9 trillion of Chinese household
savings out of banks and into equity markets as companies that are only listed
overseas such as PetroChina Co. come back home to sell shares.
(For more biz stories, please visit Industry Updates)
|
