China's capital market regulator has eased some of the rules for mergers and acquisitions in China.
China's securities market regulator approved the merger of top train makers, the CNR and the CSR, without any hesitation.
The news of the merger helped the two companies' shares skyrocket. The CSR has hit the upper daily trading limit eight times in nine consecutive trading days.
The heat has started since the latter half of last year as companies restructure their assets.
"The M&As cannot make it without the capital market. They need public money to help support their asset restructuring. That's why a better capital market environment in terms of regulation is crucial," said Liu Jipeng, China Politics & Law University.
Official statistics show there were 19-hundred and 29 mergers and acquisitions involving Chinese companies in 2014. Those cases were worth 120 billion US dollars. The number of mergers and acquisitions was a record high, jumping 50 percent from a year ago, while the value of those cases was 30 percent more than that of 2013.
The market regulator, the CSRC, has recently allow listed firms in China to fund their M&A deals 100 percent through equity issuance. That's a leap from only 25%.
"We are trying to boost the capital market's role in China's private sector. We want to support companies doing M&A via capital market fundraising, to guide more capital into the industries," said CSRC spokesman Zhang Xiaojun.
Chinese companies finished 357 M&A deals worldwide in the first quarter of this year. That's in line with the number of M-and-A deals in the same period last year, which remains a record-high level.
