Forecasts: IPOs won't have major sway on market

By Cai Xiao (China Daily) Updated: 2014-07-01 07:38

New issues by 150 firms to raise no more than 100 billion yuan in 2014

About 150 companies will make initial public offerings in China this year and their total financing won't exceed 100 billion yuan ($16 billion), which won't have a major influence on the nation's capital market, according to a report published by Ernst & Young Global Ltd on Monday.

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The report said small and medium-sized offerings will lead the A-share IPO market this year, and the most popular sectors will be technology, media, telecoms, culture and entertainment, agriculture, environmental protection and new materials.

"The financing amount of IPOs this year will not be more than 100 billion yuan, so the A-share market will not be influenced a lot," Terence Ho, EY's greater China IPO leader, said.

Ho said that a statement from the State Council, the cabinet, released in May confirmed the reform direction of China's capital market and the establishment of a new share listing system featuring increased disclosure.

"After a bumper start to the year with the reopening of the Chinese mainland's exchanges to new listings, activity slowed because of approvals again being placed on hold for most of the second quarter," said Ivan Tong, who specializes in assurance and advisory services at E&Y.

"But with a further 100 companies now expected to list, and solid investor confidence across a range of markets including Hong Kong, the IPO market can be active in the second half," said Tong.

As of June 27, 664 companies were in line for approval, and more than 80 percent of them had released draft prospectuses.