China companies' fundraising options narrow after IPO restrictions

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China's surprise move to slow the pace of mainland initial public offerings (IPOs) in an attempt to bolster the secondary market will cloud the fundraising plans of hundreds of companies and will weigh on the economy, bankers and lawyers said.

unveiled by Beijing over the weekend to revive a lagging stock market and boost investor confidence in the world's second-largest economy, which is fast losing its growth momentum.

The decision to slow IPOs comes as bond markets are difficult and expensive to tap for Chinese private companies due to the spillover effect of a deepeningThis, 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 groupBankers said that the regulatory move to slow the pace of IPOs goes against Beijing'searlier this year, which sought to remove government intervention and introduce a U.S.

 

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