China companies’ fundraising options narrow after IPO restrictions

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Measures designed to boost secondary markets may have a negative impact on the overall economy.

Data shows this year’s initial public offerings have raised US$39.7 billion, down from US$68.2 billion at the same period last year.

New share sales on the mainland had been one of the few bright spots in the Chinese financial sector this year, as geopolitical tensions and tightened regulatory curbs prompted domestic IPO-aspirants to choose home bourses over offshore stock exchanges. This, coupled with diminishing appetite for China investments by private equity firms, will leave fewer avenues for companies to tap for growth capital and will weigh on their near-term business plans, bankers and analysts said.

More than 650 companies are waiting to list on the Shanghai and Shenzhen bourses, according to exchange data.Companies in the pipeline for a market debut on the mainland include robot maker JAKA Robotics Co, semiconductor firm Shenzhen Chipsbank Technologies Co and Swiss agrichemicals and seeds group Syngenta, which is eyeing a US$9 billion IPO this year.

 

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