Chinese shares closed mixed on Monday with turnover on the Shanghai bourse falling as investors prepare for new share subscriptions scheduled to begin on Wednesday.
The benchmark Shanghai Composite Index dropped 0.22 percent to finish at 2,054.48 points, while the Shenzhen Component Index gained 0.21 percent to close at 7,274.51 points.
New share subscriptions from 11 companies are expected to freeze capital worth over 600 billion yuan (97.46 billion U.S. dollars) which will not be unlocked until as early as July 28.
Turnover slipped around 10 percent to 75.71 billion yuan on the Shanghai Stock Exchange (SSE), which was the target of the majority of subscriptions. Combined turnover on the two bourses was 171.28 billion yuan, with Shenzhen Stock Exchange remaining generally flat at 95.57 billion yuan.
Subscriptions of six pre-listed companies including Chongqing Chuanyi Automation Co. will start on Wednesday, while those from five others including Kuaijishan Shaoxing Rice Wine Co. are due on Thursday.
China's securities regulator restarted the initial public offering in April after over a year of suspension, which helped capital-thirsty companies but also weighed down China's bearish stock market.
However, there are still hundreds of companies waiting for listing on the stock market.
Hu Ruyin, chief economist of the SSE, said the supply-and-demand relationship is exceptionally imbalanced in China's capital market, as financing channels were limited for companies, which, along with excess government regulation, has made some leading firms including Baidu and Tencent turn to markets overseas.
Hu called for a reform in China's capital market and stressed the market should be allowed to play a decisive role.
Companies related to the country's latest reform on state-owned enterprises surged on Monday. Sdic Xinji Energy closed 5.54 percent higher to 3.81 yuan per share, while COFCO jumped 7.23 percent to 5.19 yuan.
Shares of battery producers for new energy vehicles also rose. Jiangsu Huachang Chemical Co. surged by the 10-percent daily limit to 7.66 yuan per share.