Zhang Yu

JeniZhang13@163.com

INITIAL public offerings (IPOs) of Shanghai and Shenzhen-listed A shares are expected to maintain good momentum and reach a new high this year, according to accounting firm PwC.

The firm predicts that there will be 430 to 490 new listings with total funds raised from new share sales reaching 450 to 480 billion yuan (US$69.7 to 74.3 billion) this year.

“Looking forward to 2021, we will see the new pattern of ‘dual circulation’ and the strategic opportunity of the 14th Five-Year Plan. These supporting factors are favorable to capital markets,” said Thomas Leung, markets leader of PwC China.

Although COVID-19 has had an impact on the global economy, the rapid and stable recovery of China’s domestic economy and the success of China’s IPO reform show that A-share listings have been unaffected.

Statistics show that in 2020, 396 companies listed in China and raised more than 470 billion yuan in capital, hitting a 10-year high.

China’s Nasdaq-style STAR Market, which has been in place for about one and a half years, has developed rapidly and seen firms raise 222.6 billion yuan in 2020, ranking first among all boards in China’s A-share market, according to data from PwC.

Of the top 10 fundraising deals in China’s A-share market in 2020, STAR Market-listed firms made up seven and the market has become the most popular board to host big IPOs in the A-share market.

Jean Sun, firmwide corporate services partner of PwC China, said the registration-based IPO reform is likely to be fully introduced to the main board and the SME board of the Shenzhen and Shanghai stock exchanges. The introduction of new delisting rules is expected to be conducive to improving the quality of listed companies and the overall environment of the domestic capital market.

“This will improve the quality of listed companies and speed up efficient market resource allocation,” Sun said.