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28 Chinese firms suspend IPO plans
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TWENTY-EIGHT Chinese companies that have obtained permission from the securities watchdog for initial public offerings (IPOs) announced Saturday evening they would postpone follow-up issue of shares due to recent fluctuations in the stock market.
The companies, 10 to go public in Shanghai and 18 in Shenzhen as planned, said they have adjusted their IPO schedule and would start to refund investors' capital on July 6, according to the announcements filed with the Shanghai and Shenzhen stock exchanges.
The suspension of IPOs came a few hours after extraordinary announcements by major brokers and fund managers, which collectively pledged to invest at least US$19 billion of their own money into stocks.
Analysts believe the postpone will help relieve the market which is in urgent need to rein in continued plunge. A string of supportive measures were rolled out in the past days but failed to reverse the losing trend.
Last Saturday, China's central bank lowered both the interest rate and reserve requirement ratio for banks to inject liquidity into the market.
On Wednesday, the Shanghai and Shenzhen stock exchanges announced a roughly 30-percent cut in stock transaction fees.
On the same day, the China Securities Depository and Clearing Company announced a reduction in stock transfer fees by about 33 percent from Aug. 1.
On Thursday, the China Securities Regulatory Commission (CSRC) said it will investigate suspected manipulation of the stock market.
On Friday, the CSRC said it will cut the number of IPOs in July in order to reduce the supply of stocks.
The Shanghai Composite Index dived 5.77 percent on Friday to finish at 3,686.92 points from a peak of 5,178.19 points on June 12, falling below the psychological threshold of 3,700 points.
As worries arise that the continued plunges in the stock market will threaten China's whole financial system, central bank governor Zhou Xiaochuan said earlier this week that "China will hold fast to the bottom line that no systemic or regional financial risks should occur."
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