TWO medium-sized domestic brokerages have announced plans to launch initial public offerings (IPOs), joining one of the country’s biggest securities firms whose subscription period last week coincided with a sharp correction to China share markets.

    Huaxi Securities, based in the southwestern city of Chengdu, said that it plans to issue up to 700 million domestic shares, or 25 percent of its expanded outstanding shares after the IPO.

    Dongguan Securities, based in the southern city of Dongguan, aims to issue up to 166.67 million shares, or 10 percent of the expanded outstanding shares, also in Shenzhen, according to its draft prospectus.

    Both brokerages would use proceeds to supplement their working capital to expand, they said in prospectuses published late Friday on the website of the China Securities Regulatory Commission (CSRC).

    The proposed IPOs will need CSRC approval to proceed.

    Guotai Junan Securities, China’s third-largest brokerage, last week had the subscription period for the largest IPO since 2010, aimed at raising 30.1 billion yuan (US$4.8 billion). It will list on the Shanghai Stock Exchange.

    That subscription period came during the worst week for China’s stock markets since the global financial crisis, as investors worried that an eight-month bull run was running out of fuel.

    The market tumbled after the CSRC and other regulators acted to cool red-hot trading, taking measures including allowing more IPOs to divert funds from the secondary market.

    The Shanghai Composite Index plunged 6.4 percent Friday and 13.3 percent for the week. The Shenzhen Composite Index slumped 12.7 percent last week.

    Between the end of June 2014 and the middle of this month, the Shanghai index rose 150 percent, partly boosted by economic and market reforms. The bull run made brokerages eager to go public or issue additional shares for expansion. (SD-Agencies)