China Regulator Says 16 Firms Withdraw IPO Plans
02/04/2013| 01:25am US/Eastern
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SHANGHAI--Sixteen companies have abandoned plans to list their shares on one of the nation's stock exchanges since late December, the China Securities Regulatory Commission said.
Eleven companies have withdrawn their applications to list on the start-up board and five firms had scrapped plans to list on one of the nation's two main boards, the regulator said in separate statements posted on its website Friday. It didn't explain the decisions or give details about the firms' financial performances.
But lengthy waiting periods for approval and a still weak stock market may have been factors in the decisions.
Since October, the CSRC halted all approvals for initial public offerings, citing concerns about a potential share glut that would further weigh on an already lackluster equity market. The regulator also heightened scrutiny of IPO hopefuls after the poor showing of some companies after they went public.
Official data show there were 873 companies waiting for IPO approval as of Jan. 31. The CSRC has asked underwriters and auditors working on possible share sales to submit inspection reports by March 31, effectively raising the regulatory threshold for new deals.
The slow pace of regulatory approvals for new listings in China is driving firms to consider other options, such as choosing an overseas venue or using smaller over-the-counter equities markets.
The companies that have given up plans for a public offer include titanium supplier Zunyi Titanium and tea producer Anxi Tieguanyin Group, both of which had planned to list on the Shenzhen stock exchange. A number of smaller technology firms were among those abandoning plans to join the start-up bard.
The benchmark Shanghai Composite Index slumped to nearly a four-year low in December and lost 31% over the past three years though it has rallied sharply in recent weeks.
Write to Esther Fung at esther.fung@dowjones.com
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