Currencies

Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

Continue Reading

Property

Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

Continue Reading

Currencies

Euro suffers worst month against the pound since financial crisis

Political risks are still all the rage in the currency markets. The euro has suffered its worst slump against the pound since 2009 in November, as investors hone in on a series of looming battles between eurosceptic populists and establishment parties at the ballot box. The single currency has shed 4.5 per cent against sterling […]

Continue Reading

Banks

RBS falls 2% after failing BoE stress test

Royal Bank of Scotland shares have slipped 2 per cent in early trading this morning, after the state-controlled lender emerged as the biggest loser in the Bank of England’s latest round of annual stress tests. The lender has now given regulators a plan to bulk up its capital levels by cutting costs and selling assets, […]

Continue Reading

Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

Continue Reading

Categorized | Financial

IPOs set to resume in China


Posted on November 30, 2013

China is to lift its year-long freeze on stock market listings and introduce new rules for initial public offerings.

The China Securities Regulatory Commission (CSRC) on Saturday published guidelines for reforming the country’s scandal-plagued IPO system, vowing to give market forces more clout and to reduce the role of the government.

    The CSRC said it expected IPOs would be able to resume in January, some 14 months after the last company floated shares in China.

    Along with allowing time for reforms to be implemented, the suspension of equity listings was widely seen as a tactic by regulators to support China’s beleaguered stock markets, which have been among the worst-performing in the world over the past three years. But the benefit has been minimal, with the Shanghai Composite, the country’s main index, rising just five per cent since the freeze began.

    Analysts have long predicted the resumption of listings would weigh on share prices. “This is a signal that the IPO floodgate may be opened soon,” said a senior executive in a Chinese brokerage.

    In an effort to allay fears about a sudden rush of new listings, the regulator said that of the 760 companies waiting to go public, only about 50 would actually be ready by January and that it would need a year to finish its checks on the others.

    The revamping of the IPO process has been one of the test cases for China’s new leaders’ commitment to allow the market to play the “decisive role” in the economy they have promised.

    As laid out on Saturday, the reforms fall short of the market-determined IPO registration system that is common in more developed financial systems, but they should help limit the government’s influence over the pricing of share offers and also boost transparency.

    The regulator said it would still conduct strict checks to ensure that information provided by IPO candidates is full and accurate before permitting them to list, but beyond that it vowed that assessments of risks and valuation would be up to investors themselves.

    “What needs to be emphasised is that this . . . cannot be understood as meaning that the regulator will have no oversight,” the CSRC said in a statement. “It does not mean that IPOs won’t be audited or that junk stocks can be easily issued. Rather, it means that the auditing system will be reformed.”

    In the past, companies in China have been able to issue shares with minimal or inaccurate information disclosures, reaping huge price gains as retail investors are lured in to buy stocks. To increase transparency, the regulator said companies would have to publish more extensive financial records and make them publicly available earlier in the listing process.

    It also said it would make securities firms more accountable for the listings they underwrite. For example, should any company suffer a more than 50 per cent loss in profits in the first year after it goes public, the regulator will have the right to suspend the sponsor’s underwriting license.

    In another announcement on Saturday, the securities regulator said it would start a long-expected trial permitting companies to issue preferred shares, which will allow them to raise more equity without immediately diluting existing investors.