Stocks expected to spring back to life

Reform was the primary theme of China's capital markets in 2013. This year is set to be more dramatic.

Last year, markets were mostly stagnant. The gates were shut for domestic initial public offerings as the process of going public was reformed.

There were a few fireworks, such as the June and December cash crunches.

Some investors managed to profit despite the approximately 7 percent decline in the benchmark Shanghai Composite Index; others lost money amid volatility.

This month, the IPO doors are set to swing open again on the Chinese mainland. Reforms are expected to change the market's dynamics and investors, banks and venture capitalists are rethinking market strategies.

More IPOs

The A-share market will experience an IPO rush in 2014. Consultancy and accounting firm Deloitte Touche Tohmatsu has forecast that 230 companies will hit the market, raising up to 170 billion yuan ($27 billion).

The China Securities Regulatory Commission has said that at least 50 IPOs will hit the market in January.

Smaller IPOs will dominate the market, according to Deloitte, as regulators try not to let the flood of IPOs strain market liquidity.

The majority of the 83 companies that have finished CSRC reviews are expected to raise less than 500 million yuan in total. And most of those companies will go public on the growth enterprise board and the small and medium enterprise board.

Ernst & Young has forecast that industrials, technology, media and telecommunications companies will be among the top listing sectors in 2014.

Shaanxi Coal Industry Co Ltd will be a major IPO. The company, 71 percent owned by Shaanxi Coal and Chemical Industrial Group, is hoping to raise 17.25 billion yuan.

So far, 673 companies have lined up to issue shares, and experts believe that it will take at least two years for all of them to go through.

Regulators have said they'll carefully watch for any irregularities among the IPOs, especially artificially high issue prices. Keeping issue prices high has been one of the main ways institutional investors and investment banks have gained at the advantage of smaller investors.

The Hong Kong exchange, which held IPOs for 41 mainland companies in the first 11 months of 2013, will likely see fewer mainland candidates in 2014. Figures from consulting firm China Venture Group show that the funds raised by those 41 companies accounted for 94 percent of the funds that mainland companies raised worldwide during the period.