Mainland dominates global IPO market during first half

Kong Qingwei (left), Party chief of the Shanghai Financial Service Office, and Yang Dehong, chairman of Guotai Junan Securities Co Ltd, ring the gong to open trading of shares in the company at the Shanghai Stock Exchange on June 26. [Photo/China Daily]

The Chinese mainland led the global initial public offering market in terms of funds raised and the deal number during the first six months, said a report published by PricewaterhouseCoopers on Thursday.

A total of 187 companies were listed on the Shanghai and Shenzhen bourses during the first-half and these companies collectively raised funds to the tune of 146.1 billion yuan ($23.6 billion), indicating that the market is poised for further growth in the next six months.

Of the 187 IPOs, 78 got listed on the main board, 35 on the small and medium-sized enterprise board and 74 on the ChiNext market, China's Nasdaq-style market.

"Both the number of IPOs and funds raised during the first six months on the A-share market surpassed the total for the whole of 2014. The strong growth in the IPO market was the inevitable result of favorable policies issued by regulatory authorities and market reforms," said Frank Lyn, PwC mainland and Hong Kong market leader.

"As the China Securities Regulatory Commission gradually optimizes the administrative approval process for initial public offerings, the time required for examining and approving IPOs and refinancing applications will be shortened, signaling the impending arrival of the registration-based IPO reforms."

The report forecast that 400 companies will undertake initial public offerings in the A-share market this year and raise about 300 billion yuan.

"We foresee more activities in the Chinese IPO market during the second half of the year. These companies will primarily be small and medium-sized enterprises in the industrial, information technology, financial services and consumer goods sectors," said Lyn.

According to the report, since 2014, the number of listed companies in the National Equities Exchange and Quotation System, China's third national equity exchange, has grown rapidly. The market-maker system introduced in August 2014 has pushed the NEEQ to new heights.

There were only 356 listed companies at the NEEQ at the end of 2013. Since then, the number has climbed to 2,615 as of June 30 this year. The annual trading volume at the NEEQ rose to 13 billion yuan in 2014, and during the first six months, surged to 103.9 billion yuan.

Jean Sun, PwC China assurance partner, said: "With no profit threshold requirements, the NEEQ is the ideal starting point for Internet and technology companies in the domestic capital market."