By Ding Qi (chinadaily.com.cn)
Updated: 2008-03-21 16:15

The securities regulator would continue to support the expansion of qualified property firms via initial public offerings (IPOs) and mergers in the capital market, but wouldn't allow them to buy commercial land with the funds raised, an official with the China Securities Regulatory Commission (CSRC) said yesterday.

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According to a report from the Shanghai Securities News Friday, the unnamed official said that the regulator would not approve developers' IPO applications if they intended to purchase commercial land or hoard land and houses with the money raised.

The CSRC would also closely follow the firms' investment progress and project returns according to their prospectus before raising funds to ensure expected commitments were fulfilled and money was properly used.

No list restrictions

Quashing rumors that all fundraising moves by property firms had been suspended to cool the industry, the official said the CSRC didn't halt any listing procedures of property firms, nor restrict their normal operations in the stock market.

Property firms seeking IPOs and follow-on offerings got the same treatment from the CSRC as other firms, the official said. So far this year, the CSRC has approved two property firms to go public and five more are currently under assessment. In addition, four listed developers had raised 13.2 billion yuan ($1.86 billion) from the bourse, he said.

The official added it was groundless to say that listed property firms' generous spending in land auctions with IPO money had further pushed the housing prices up.

He said between early 2007 and the end of last month, 120 listed property firms raised a total of 57.8 billion yuan in the stock market. The figure accounts for only 6.7 percent of the total fundraising volume in the market and 2.3 percent of the actual investment of all property firms in China last year.

So far, there are more than 50,000 property firms in China. Assisting the qualified ones to go public would help to optimize the industry's financing sources, improve management standards and boost the supply of residential houses, the official said.