China's government recently stirred local stock markets by signaling the end of a ban on new listings on the Shanghai and Shenzhen bourses and the ChiNext board. Still, the 760-plus applicants who have been waiting in the wings -- some for nearly 14 months -- should not get too excited. In the first days of the new year, the authorities granted two batches of approvals for a total of 11 initial public offerings.
Under new guidelines issued by the China Securities Regulatory Commission (CSRC), underwriters will have a much larger role in determining key matters such as pricing and allocations. But government regulators will retain a heavy hand in managing the new issue pipeline in what will remain, for the foreseeable future, a mainly domestic capital market.
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