Companies See Stock Prices Soar on their Debut in Stock Listings
The shares of three small companies that listed themselves in Shenzhen has seen stock prices soar by 40 percent in their debut in the first listings in china after four months which highlighted challenges of stock regulators are now facing way of weeding out any speculation and at the same time curb volatility of the market.
Signs of a strong demand for new shares from firms ranging from waste disposal companies, a meat processing company and a digital security firm have all risen by 44 percent from the IPO prices the maximum allowed prices on the first day of trading. According to the China Securities Regulatory Commission that resuming of the initial public offering market is a good sign after stopping the listings for nearly 14 months, but after a two month of flurry of activity there were no more offering approved until June after seven companies got their go ahead signal to trade last Thursday. Furthermore the CSRC will stop involving itself in the IPO pricing and move to a registration based system that is the same from developed economies where the market is the one that decided who to list and for how much.
But economic watchdogs are keeping a close eye to the supply and pricing which they announced earlier that companies that set their IPO price to earnings ratios higher than ratios of industrial peers will need to publish warning before they open up any subscription to retail investors and they will need to carry out checks on prices and on pre marketing of IPOs.
Regulators will try not to interfere with any if the IPO pricing since China has its own special economic arrangement, and the Commission also has its own reasons in monitoring prices so the stock market will not overheat.