China stocks rise as investors welcome gradual IPO approach
SHANGHAI, DEC 10:China stocks rose on Thursday as investors responded positively to a government announcement that it would shift to a US-style registration system for initial public offerings within two years, a transition regulators described as being "gradual".
The CSI300 index rose roughly 1 per cent, while the Shanghai Composite Index edged up 0.6 per cent.
Adopting the new IPO system means that the market, instead of regulators, would decide which firms get to list and for how much. But that has fuel;ed fears that a large number of companies could rush to the stock market for fund-raising at the same time.
In an apparent move to ease investors' concerns, China's securities regulator said that the reform will be a gradual process, and the IPO floodgate would not be opened all of a sudden.
"It looks like IPOs would still be under some sort of control, so the registration system doesn't seem as frightening as previously thought," said Shen Weizheng, fund manager at Shanghai-based Ivy Capital.
Brokerage shares were generally strong, as investors bet the new IPO system would boost their underwriting revenues.