CSRC scales back on new IPOs

The China Securities Regulatory Commission (CSRC) has approved no new IPOs for A-share markets this month, a development which points to the regulator's eagerness to hold back new offerings amid concerns that the mainland equity market is already suffering from an excess of listings, experts say.

The CSRC hasn't held and will not hold any IPO approval meeting this month, according to its official website. The purpose of these meetings is to determine whether or not a firm is suitable for a public listing.

Firms currently in the IPO pipeline will have to wait until next month, at the earliest, for a decision from regulators. During June and July, the CSRC reviewed 26 and 29 applications respectively.

Meanwhile, the number of new IPOs hitting mainland stock exchanges is also slowing down. Only nine companies which had previously been granted IPO approval from regulators have made their debuts on mainland boards since the start of August, and another three are set to launch before the month is out. The 12 new listings this month is down from the monthly average of 17 seen since the start of the year.

The regulators plan to slow, but not cease, the IPO approval procedure, according to a report by the 21st Century Business Herald Tuesday, citing an insider close to the CSRC. Review meetings will probably restart as early as the beginning of September, the insider said.

"By postponing IPO approvals, the CSRC intends to ease the oversupply of stocks and give the market enough time to make reforms," Guo Tianyong, a finance professor with Central University of Finance and Economics, told the Global Times.

However, it is still too early to see what kind of effect the IPO slowdown will exert on the market, said Qian Qimin, deputy director of Shenyin & Wanguo Securities' market research department.