China to loosen IPO restrictions by reinstating listings of unprofitable start-ups: CSRC
Relaxation comes as a surprise to investors after two years of tough IPO approvals by the CSRC
And in an effort to promote long-term investments in Chinese stocks, qualified overseas investors would be permitted to trade options linked to underlying exchange-traded funds starting on October 9 to hedge their bets, the CSRC said in a statement on its website on Wednesday.
The relaxation of rules on new share sales came as a surprise to market participants reeling from stricter 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 was also seen as supportive of start-ups at a time when Beijing is seeking to reduce its tech reliance on the US amid simmering confrontations from trade to finance.
“Innovation requires alliance among scientists, entrepreneurs and investors,” Wu said. “Based on the practice at home and abroad this year, whether those big and powerful data or small and beautiful tech innovations, they cannot make it without the support of the capital market.”
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 finishing 0.5 per cent higher. A gauge of the ChiNext board rose 0.2 per cent.