OPINIONS IPOs a positive signal emerging from China's A-share market

OPINIONS

IPOs a positive signal emerging from China's A-share market

China Daily

07:11, December 09, 2022

Investors check share prices at a securities firm in Nanjing, Jiangsu province. [Photo by Xing Qu/For China Daily]


China has led the world in the number of IPOs issued in its A-share market and the amount of funds raised till November, says a report by accounting firm PricewaterhouseCoopers. Around 400 IPOs will be issued in the A-share market this year, raising more than 560 billion yuan ($80 billion).

Despite some countries going after Chinese companies, China's capital market has managed to maintain sound development and create a stable listing environment for domestic enterprises, effectively increasing the scale of direct financing for enterprises and creating good conditions for them to enhance competitiveness, increase technology research and development, and strengthen brand cultivation.

China's economy has demonstrated huge resilience, laying a solid foundation for the A-share market, thus ensuring that external factors do not erode investor confidence. If the capital market performs well, and capital market transactions remain active, investors will have more confidence and stronger investment desires, which will better promote the economy and create better conditions for enterprises' financing and refinancing. This will also ease the pressure on business operations, stimulate the vitality of micro entities, stabilize employment and boost domestic demand.

Many researchers and analysts believe that in recent years, China's economy, especially Chinese enterprises, and the capital market, have formed positive interactions and promoted positive mutual development. The water of the Chinese economy has fed the fish of the capital market, and the fish of the capital market have added vitality, blood and resilience to the Chinese economy.

To better promote the economy, China's capital market should make greater efforts to improve the quality of listed companies, strengthen market oversight, and improve delisting efficiency to better protect the rights and interests of investors. It is very important that a "good money drives out bad money "mechanism is created to improve investor confidence.

Improving investor confidence is key to maintaining the vitality and enhancing the viability of the market. China's strong economic resilience, enterprises' rising listing enthusiasm, and recovering investor confidence are all favorable to the domestic capital market. However, whether it can enjoy greater development in the future also depends on whether it can substantially improve its quality and standardize its order, especially whether it can better combine the punishment of the responsible person with the compensation for investors for anything that damages the interests of investors.

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