Beijing to speed up approval of IPOs

China’s top securities regulator has pledged to speed up approvals of initial public offerings (IPOs), as the government seeks to attract capital and boost domestic growth.
Buoyed by the capital market’s recovery from a 2015 rout, the China Securities Regulatory Commission (CSRC) on Sunday indicated it would loosen its grip on the nation’s stock markets.
The CSRC decides which companies offer shares and when, as well as setting guidelines for the number of shares and their price — all of which are determined by the market in other countries.
Regulators responded to the equities rout in the summer of 2015 by freezing new IPOs in an effort to stabilize stock prices, but CSRC chairman Liu Shiyu vowed to end this practice and introduce “new progress and breakthroughs.”
More than 600 companies seeking to list in the market have struggled with long wait times, followed by seemingly arbitrary approvals.
Liu said faster approvals, particularly for companies in poverty-stricken countries, would attract new capital and boost investor confidence.
“Liu seems to be the first CSRC chief to publicly denounce the practice of shutting down the IPO market whenever there is a crisis,” Dong Dengxin, a finance professor at Wuhan University of Science and Technology, told the official Xinhua news agency.
The CSRC’s planned reforms come as the government tries to staunch a flood of capital heading overseas as investors look for better returns, with interest rates expected to rise, putting pressure on the yuan and threatening the economy.
After Chinese firms went on a multi-billion-dollar foreign acquisition spree last year, the government responded by blasting what it called “irrational” spending and started rolling out new restrictions to curb the outflow of money.
The Shanghai Composite Index ended 0.76 percent lower Monday, in line with a sharp sell-off across Asian stock markets.
‘Trade deficit narrows to $20.9 billion’
China’s trade deficit in services narrowed to $20.9 billion in January from $26.1 billion in December, the foreign exchange regulator said on Monday.
January’s deficit was largely due to a $19.7 billion gulf in spending between foreign tourists and the Chinese, who splurge more abroad than foreign tourists in China, data from the State Administration of Foreign Exchange (SAFE) showed.
China’s trade deficit in services widened to $260.1 billion last year, from $206.5 billion in 2015.

Source: Arab News