China is ending a year-long moratorium on IPOs and relaxing the rules governing the way companies are approved for public trading on stock exchanges.
Released by the China Securities Regulatory Commission over the weekend, the new guidelines suggest that up to 50 companies will be ready to go public by the end of January.
The new listings should break the logjam of firms lining up to issue shares in China. There are currently almost 800 companies waiting for an IPO — a list that has grown over the past year as Chinese regulators tried to support floundering equities markets by suspending new offerings.
Beleaguered mainland stocks have largely missed out on the global rally, with the benchmark Shanghai Composite losing more than 22% of its value over the past three years. Since the IPO moratorium was put in place, the index has risen about 10%.
China also said it was moving away from its approval-based IPO scheme — an onerous and time consuming process that favors state-backed enterprises over small and mid-sized companies.
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