China's stock regulator is set to stop local companies in certain sectors from listing on the country's main stock exchanges, the Financial Times (FT) reported on Jan. 9, citing sources.
The China Securities Regulatory Commission (CSRC) has informed bankers it has given some industries, including food and beverage and COVID-19 testing companies, a "red light" that stops them from equity financing on Shanghai and Shenzhen main exchanges, the report said.
The China Securities Regulatory Commission (CSRC) has given a "red light" to companies in several industries, including food and beverage chains and COVID-19 testing companies.
The “yellow light” was given to sectors, such as apparel and furniture, where initial public offering requests could come under heavy scrutiny if their growth relies heavily on debt for expansion, according to the CSRC report.
The regulator’s move to refresh the listings guidance underscores Beijing’s efforts to make the country’s equity exchanges serve its national agenda, said analysts. As the FT notes, The regulations come even as the CSRC has pledged to push ahead with reforms to remove regulatory hurdles to listing.
In 2022 428 companies raised a record 587bn yuan ($87bn) on the Shanghai and Shenzhen bourses. More than 760 groups in the IPO pipeline, some of those IPOs could now fall victim to the latest guidance.
Source: Financial Times