Tuesday 24 August 2021 10:30 am

China pauses over 40 IPOs as hawkish eyes fall on intermediaries

Shanghai and Shenzhen stock markets have hit pause on more than 40 initial public offerings, as Chinese regulators probe several intermediaries featuring in the deals.

The Shenzhen Stock Exchange has suspended more than 30 initial public offerings (IPOs), including public listing plans by electric car manufacturer BYD’s chip-making unit, which was scuppered on Wednesday.  

While the Shanghai Stock Exchange has frozen eight IPOs which were on route for the city’s tech-focused STAR Market since last week, according to official exchange disclosures.

Beijing-based Tian Yuan Law Firm, China Dragon Securities Co and CAREA Assets Appraisal are among the intermediaries being investigated by local watchdog China Securities Regulatory Commission (CSRC).

China said on Monday that it would tighten scrutiny over accounting firms in a bid to tackle financial forgery.

It comes amid an already turbulent IPO landscape in the country, particularly on Hong Kong’s market which has seen just one IPO grace its stage so far this month.

Investors, both local and global, have been spooked by China’s hawkish scrutiny across sectors – which has hit technology-based businesses hardest.

International investors have long used Hong Kong as gateway to China, but they are increasingly concerned by Beijing’s policies.

The lagging IPO process will also foil China’s plans to turn its Shanghai-based STAR Market into a serious rival to the US’ Nasdaq.