China plans to lift its moratorium on IPO listings before the end of the year, the official news agency Xinhua said earlier today.
The country had instituted a ban on IPOs back in July, after shares roared along for the first half of the year, bolstered by numerous moves by the Chinese government. Among them, it cut benchmark interest rates, reduced stock market transaction fees and even reconsidered its stance on variable interest entity structures, which are used by China-based companies to list in the U.S. and are hard to unwind.
Those plans panned out. China’s stock market was up 50 percent for the year as of mid-June.
Then shares began to slip – then to drop more dramatically – driven by margin calls. When the rally reversed, China halted all impending IPOs.
It isn’t the first time China has put the kibosh on IPOs. A previous 15-month freeze ended in December 2013, during which time 750 new offerings were blocked.
As Dealbook notes, China took some other harsh measures this time around, too, including disallowing investors to bet against stocks, ordering state-owned brokerages to buy shares on the country’s behalf, and banning large shareholders from selling their stakes in companies.
With shares ticking upward again as a result of those measures – the Shanghai share index has risen 23 percent since late August, reports Dealbook – the country is now preparing to let companies out of the gate again, starting with 28 outfits that had seen their already-approved listings interrupted by the freeze.
According to Reuters, they have two weeks to prepare, with the first batch of 10 companies expected to launch after November 20.