The China Securities Regulatory Commission (CSRC) has approved three applications for initial public offerings, bringing an end to a two-month hiatus.
China initially set a 14-month moratorium for IPOs in October 2012 without giving an official explanation, but 48 companies were permitted to list in early 2014. However, new offerings stopped in March, a development analysts attributed to poor market conditions, or loopholes supposedly discovered in new IPO rules issued in 2013, Marketwatch stated.
The approvals, for Nanjing Kangni Mechanical & Electrical Co., Ellington Electronics Technology and Kuaijishan Wine Company, granted yesterday, mark the resumption of public offerings in China, though engineering firm EDG China had its application rejected.
CSRC gave permission to 28 companies to publish preliminary IPO plans on April 18, and altogether 122 businesses have disclosed preliminary prospectuses since that date. In total, 632 companies are reportedly awaiting the go-ahead to go public in China.
The uncertainty surrounding the IPO system in China has resulted in several China-based companies opting to list in the US instead. The largest of these is certain to be e-commerce company Alibaba, but microblogging platform Weibo recently raised $285m from a US IPO, and Tuniu and Cheetah Mobile have both filed for US IPOs in the past month.
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