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The Star
07-07-2025
- Business
- The Star
Regulatory curbs hurt mainland China IPOs, ceding first-half crown to Hong Kong
Mainland China's three stock exchanges had a sluggish first half, raising a third of the bounty from initial public offerings (IPOs) in Hong Kong, due to a regulatory crackdown that has hobbled fundraising since August 2023 and left the primary market in the lurch. Some 50 companies raised a combined 33.6 billion yuan (US$4.7 billion) by selling new shares on the nation's three exchanges, according to data compiled by Bloomberg. That was a third of the US$13.5 billion raised on the Hong Kong stock exchange, which leapfrogged 12 spots from a year earlier to become the world's top-ranking IPO destination in the first half. 'As long as the regulatory curb remains in force, the IPO market won't return to normalcy,' said Dai Ming, a fund manager at Huichen Asset Management in Shanghai. 'But the good thing is that as a result, more good-quality companies in emerging industries will be listed going forward.' Mainland China's most valuable offering in the first half of the year was Zhongce Rubber Group, a Hangzhou-based tyre maker that drew 4.07 billion yuan by selling shares on the Shanghai Stock Exchange, according to Bloomberg. That was just a fraction of the US$5.24 billion that was raised in Hong Kong in May by Contemporary Amperex Technology, the world's largest maker of batteries for electric vehicles. Consumer-electronics maker Arashi Vision came in second place on the mainland, pulling off a 1.94 billion yuan offering on the Shanghai bourse's tech-heavy Star Market. Shenzhen Kaifa Technology, which makes smart metering terminals, ranked third after completing an offering valued at 1.17 billion yuan on the Beijing Stock Exchange. Holding shares of the 50 IPOs since their debuts on the mainland fetched an average return of 214 per cent, according to Bloomberg data. But those gains were inflated by regulations, as new shares were priced at around 23 times earnings in an effort to make sure there were no flops. A ray of hope emerged last month when Wu Qing, the CSRC's chairman, said China would reinstate rules that allowed listings of unprofitable companies to support tech innovation. Listings of pre-profit companies had been suspended since the regulatory clampdown started. Wu's remark was seen by some as a sign that the regulator was softening its stance on IPOs. According to Shanghai-based brokerage Shenwan Hongyuan Group, the move would have a positive impact on IPOs and the pace of new shares could quicken slightly in the second half. It said it expected between 80 and 120 companies would raise between 70 billion and 83 billion yuan from IPOs this year. - SOUTH CHINA MORNING POST
The Independent
27-06-2025
- Business
- The Independent
Nation set to further advance financial opening-up
China will further advance the opening-up of its financial sector and capital markets, with Shanghai spearheading the efforts, a move that will bring fresh opportunities for collaboration in an increasingly fragmented international financial system, officials and experts said. At the 2025 Lujiazui Forum held in Shanghai, China's top financial regulators unveiled a raft of new opening-up measures on 18 June, including setting up an international operation centre for the digital yuan, or e-CNY, widening foreign institutions' access to financial business pilot programmes and improving the qualified foreign institutional investor, or QFII, programme to facilitate overseas investment. 'We are committed to aligning China's financial regulations with high-standard international economic and trade agreements, exploring broader and deeper areas of opening-up,' said Li Yunze, head of the National Financial Regulatory Administration. Li said that China will leverage successful practices from free trade zones and ports, supporting the greater participation of foreign institutions in financial business pilot programmes. Wu Qing, chairman of the China Securities Regulatory Commission, said the country will soon optimise the QFII programme — which facilitates overseas institutions' investments in financial markets — by easing entry requirements and facilitating investment operations. The number of futures and options products available to QFIIs will increase to 100 at an early date. The CSRC announced later that day that starting on 9 October, QFIIs will be allowed to engage in the trading of exchange-traded fund options listed on trading venues for hedging purposes. With regulators swiftly turning pledges into action, Yang Haiping, a researcher at the Shanghai-based SIFL Institute, said that China is demonstrating its commitment to advancing high-standard institutional opening-up at a deeper level, injecting positive momentum into an increasingly uncertain global environment. 'The moves signal a shift in China's high-level institutional financial opening-up — from passively adapting to existing international rules to proactively exploring new practices for high-level openness,' Yang said. Pan Gongsheng, governor of the People's Bank of China, the country's central bank, announced at the forum an innovative measure for establishing an international operation centre in Shanghai for the e-CNY, aimed at advancing the international use of the digital yuan and serving innovation in digital finance. Lou Feipeng, a researcher at the Postal Savings Bank of China, said the centre will create more application scenarios for the e-CNY and improve cross-border payment services, helping the renminbi play a greater role in enhancing the international payment system. Pan also announced another measure conducive to renminbi internationalisation — the development of offshore bonds in Shanghai's free trade zone. The initiative aims to broaden financing channels for Chinese companies expanding globally and for high-quality enterprises participating in the Belt and Road Initiative. Analysts said the move can help position Shanghai as a key hub in the offshore renminbi market. Christopher Hayward, chairman of the policy and resources committee of the City of London Corporation, said that China's greater openness will benefit both the country and the United Kingdom. 'The more that China can open up, the better that will be for the Chinese economy,' Hayward said on the sidelines of the forum. 'China has a great future — one which the UK wants to do business with.' Official data shows the foreign insurers' market share has more than doubled in China, from 4 per cent in 2013 to 9 per cent now, while foreign banks currently account for nearly 20 per cent of China's derivatives market, demonstrating the country's openness to global financial institutions.
Arab Times
22-06-2025
- Business
- Arab Times
China's booming tech sector redraws investment map
BEIJING, June 22, (Xinhua): China's surging technology innovation is rewriting the playbook for foreign investors, with the country's booming tech sector having reshaped expectations regarding its long-term growth potential. The latest example came as Goldman Sachs unveiled a list of what it has identified as China's Prominent 10, a move reminiscent of the Magnificent Seven, a group of high-performing and influential stocks in the U.S. tech sector. The top 10 Chinese stocks, most of which are affiliated with tech giants, are expected to significantly expand their share of China's equity market over the coming two years. Among these 10 are internet behemoth Tencent, e-commerce giant Alibaba, smartphone maker Xiaomi, electric car manufacturer BYD, digital shopping platform Meituan and pharmaceutical company Hengrui. They 'embody the theme of AITech development, self-sufficiency, going global, services and new forms of consumption, and China's improving shareholder returns,' according the investment bank's research findings. Behind the stock picks spreadsheets of Wall Street economists lies a deeper recalibration, with those observers who once declared 'peak China' now overhauling their models, and transitioning to a view which sees tech innovation as driving a new wave of substantial expansion in China. Last month, MSCI added five Ashare stocks, including VeriSilicon, Baili-Pharm and APT Medical, to its China Index. These new constituents are mostly in tech and biotech sectors, refl ecting global index compilers' recognition of China's economic transformation. Top global investors, including Goldman Sachs and JP Morgan, have turned bullish on China's market -- driven by global investor interest in Chinese equities due to the country's AI push, led by DeepSeek. This month, notably, major investment banks have raised their growth forecasts for the Chinese economy. As of May 29, the Hang Seng Tech Index had surged over 40 percent year on year, outperforming major global tech indices. Of the top ten most actively traded Hong Kong stocks, seven are Hang Seng Tech constituents, with the three most active being Tencent, Alibaba and Xiaomi. China's AI breakthroughs highlight its supply chain and innovation strengths, supported by a robust ecosystem of infrastructure, data, talent and energy, said Xing Ziqiang, Morgan Stanley's chief economist for China. 'China's tech innovations are shifting from isolated breakthroughs to systematic integration, with many fields experiencing their 'DeepSeek moment' and some emerging tech firms achieving a global presence from the start,' said Wu Qing, head of the China Securities Regulatory Commission, at a forum in east China's Shanghai on Wednesday. Additionally, tech stars like Deep- Seek and Huawei weren't included in Goldman Sachs' stock picks only because they're not publicly traded. Beyond these giants, many Chinese startups are rising to prominence. China now has more than 400 unicorn companies, nearly one-third of the global total. The country's recent economic data also support such an outlook. Data from the National Bureau of Statistics shows that China's hightech manufacturing added value grew by 8.6 percent in May, outpacing the overall growth of large-scale industrial added value by 2.8 percentage points. Within this sector, production of 3D printing equipment, industrial robots and new energy vehicles increased by 40.0, 35.5 and 31.7 percent, respectively. China is not only the largest market but arguably also the world's innovation hub, propelling cost efficiencies and next-gen robotics development, said a Morgan Stanley research note recently. 'It is becoming apparent that national support for 'embodied AI' may be far greater in China than in any other nation, driving continued innovation and capital formation,' said Zhong Sheng, Morgan Stanley's head of industrials research. 'The continuing AI and technology breakthroughs have rewritten the narrative and brightened the growth prospects' for China's privately-owned enterprises, who also lead the charge of 'China's 'Going Global' ambition,' according to the Goldman Sachs report. This year, overseas demand for China's AI-driven tech products has surged. Data from AliExpress reveals that during its March promotion, sales of ARVR glasses, led by brands like XREAL and Rokid, had jumped 600 percent from the previous month. 'Last year, our AR glasses' overseas business accounted for nearly 70 percent of total sales, with overseas sales growing by 30 percent year on year,' said Zhang Longjie, global sales head of consumer-grade AR glasses firm XREAL. Despite global uncertainties, China's high-tech product exports performed strongly in the first five months of 2025 -- rising 6.1 percent year on year in U.S.-dollar terms, according to the General Administration of Customs data.
Business Recorder
18-06-2025
- Business
- Business Recorder
China, HK stocks down as annual financial forum offers few surprises
SHANGHAI: China stocks dipped slightly on Wednesday as speeches by top financial regulators at the opening of the annual Lujiazui Forum delivered few fresh policy signals. Hong Kong shares also fell. China, HK stocks close up as investors digest mixed macro data China's blue-chip CSI300 Index edged down 0.1% by the lunch break, while the Shanghai Composite Index lost 0.2%. Hong Kong's benchmark index Hang Seng was down 1.2%. China will advance the development of science and technology bonds to support innovation, Wu Qing, chairman of China's Securities Regulatory Commission, told the Lujiazui Forum in Shanghai on Wednesday. Meanwhile, the country's foreign exchange regulator vowed to keep the yuan exchange rate basically stable and fend off external shocks and risks. With few policy surprises from the forum, investors turned their focus to the upcoming July Politburo meeting for clearer signals on economic support. One of the few bright spots onshore were liquor shares , which rebounded for the third straight session, after tumbling to their lowest level since September 2024 after some of China's civil servants were banned from dining out in groups of more than three. Risk sentiment remained fragile on Wednesday as Iran and Israel launched fresh missile strikes at each other, extending their air war into a sixth day. Hong Kong shares of Chinese electric vehicle (EV) maker Li Auto fell nearly 4% to their lowest since May 9.
South China Morning Post
18-06-2025
- Business
- South China Morning Post
China to loosen IPO restrictions by reinstating listings of unprofitable start-ups: CSRC
China plans to resume listings of unprofitable start-ups on its technology boards in an effort to support the nation's drive toward technological self-sufficiency and roll back curbs on the initial public offering (IPO) market , according to the head of the stock market regulator. At the Lujiazui Forum in Shanghai on Wednesday, Wu Qing, chairman of the China Securities Regulatory Commission (CSRC), said listings would be restarted for pre-profit firms seeking to trade on the Shanghai exchange's Technology and Innovation Board, also known as the Star Market . The watchdog would also apply the rule to Shenzhen's ChiNext board, which hosts smaller companies. The relaxation came as a surprise to investors after two years of strict IPO approvals by the CSRC, which sought to arrest a decline in China's US$10.5 trillion stock market by reducing equity supplies. The move is seen as a supportive measure for China's start-ups at a time when Beijing is seeking to reduce its tech reliance on the US amid simmering trade tensions. 'Innovation requires alliance among scientists, entrepreneurs and investors,' Wu said. The Star Market 50 Index, which tracks the 50 biggest stocks on the board, including Semiconductor Manufacturing International and artificial intelligence (AI) chipmaker Cambricon Technologies, reversed a loss of as much as 0.4 per cent before trading little changed. A gauge of the ChiNext board dropped 0.4 per cent. The relaxation was meant to 'better and more precisely' serve high-quality tech companies that have breakthroughs, big spending on research and development, and promising business outlooks, Wu said. A wider array of unprofitable companies – including firms engaged in AI, commercial aviation and the low-altitude sector – could apply for listings on the Star Market before they became profitable, he said. The CSRC would also kick off a trial programme introducing 'seasoned' professional investors to trade the stocks after listings, Wu said.
