Five Chinese companies said Tuesday that they had received permission to raise a combined 2.1 billion yuan (US$347 million) in initial public offerings (IPOs), ending a year-old official freeze on flotations.
Five Chinese companies said on Tuesday that they had received permission to raise a combined 2.1 billion yuan (US$347 million) in initial public offerings (IPOs), ending a year-old official freeze on flotations.
In separate statements, the firms announced the nation's stock regulator had given the green light for their share offers, following a suspension of such approvals in November 2012.
The move came after the China Securities Regulatory Commission said last month that IPOs could resume as early as January, under new rules that aim to make the process more market-oriented.
Analysts welcomed the move, saying companies needed to be able to raise cash.
"Fund-raising is an indispensable part of the stock market, which will only be revitalised after embracing new companies," Central China Securities analyst Zhang Gang told AFP.
China's regulator has traditionally decided which firms can launch IPOs and when they go to market, instead of underwriters and the companies themselves, though authorities have pledged reform.
Roughly 50 of the more than 760 firms lining up for share offers are expected to list on China's two stock exchanges by the end of January, a regulatory official has said.
In the first batch of five companies, only one will list on Shanghai's main board for blue chips, while four others will target boards aimed at small enterprises and technology firms on the Shenzhen stock exchange in southern China, according to their statements.
The firm, which will float on the Shanghai exchange, Suzhou-based Neway Valve Co., aims to raise 839.2 million yuan for investment in production facilities, it said.
The pace of new listings on Shanghai's main board was expected to be slower, analysts said, as regulators fear new issues will drain funds away from existing shares.
"The ChiNext (technology) board will be the main battlefield, while the pace of IPO resumption on the Shanghai market will likely be slower as the issuance of large-cap shares will put more pressure on market liquidity," Zhang said.
The five firms will probably start roadshows for their IPOs on January 2, the China Business News newspaper reported on Tuesday.
Despite the threat of share oversupply impacting an already weak market investors shrugged off the announcements, which had been expected since the market regulator flagged the coming move in late November.
The benchmark Shanghai Composite Index closed up 0.88 per cent on Tuesday, while the Shenzhen index rose 0.33 per cent.
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