China Approves Six IPOs Despite Market Turmoil

(WSJ) China’s stock regulator approved plans for six initial public offerings despite a market slump into bear territory and no sign of immediate recovery.

The China Securities Regulatory Commission approved IPOs for the companies, including Bank of Jiangsu, in a statement published on its website Wednesday. Many Chinese market watchers had been predicting that the regulator might slow the pace of IPOs to counter the market slide.

Nanjing-based Bank of Jiangsu, the country’s third-largest regional commercial bank, will become the first regional bank to list on the mainland’s stock market in nearly eight years, since Bank of Beijing Co. , Bank of Ningbo Co. and Bank of Nanjing Co. sought listings on the A-share market in 2007.

In a preliminary prospectus filed with China’s securities regulator on June 12, Bank of Jiangsu said it would issue no more than 2.6 billion shares, and its total shares won’t exceed 13 billion after the issuance. It didn’t disclose how much capital it planned to raise, but will use the money to replenish funds.

The CSRC didn’t say when Bank of Jiangsu would list. The bank couldn’t immediately be reached for comment.

The bank registered total assets of 1.03 trillion yuan ($165.9 billion) at the end of 2014, according to its annual report.

Transportation-systems provider Nanjing Doron Technology, Zhejiang-based port operator Zhoushan Port, and car-lubricants maker Qingdao Copton Technology were also among the companies that got IPO approval.

The CSRC statement was released after the market closed Wednesday, when the benchmark Shanghai Composite Index dropped 5.2%. The Shanghai Index plunged 7.4% last Friday, the biggest single-day loss since the 2008 global financial crisis, and is down more than 20% from its record high in mid-June. That has triggered calls from some analysts for a halt in approving IPOs.

China’s securities regulator has picked up the pace of approving IPOs from once a month to twice a month since April, partly to cool what had been a very hot equity market prior to the recent slide. A total of 48 IPOs were issued in June, raising combined capital of 61.4 billion yuan. That was nearly five times the amount in April, according to data provider Wind Information.

Source: Wall Street Journal