Zhang Yu

JeniZhang13@163.com

CHINESE firms are expected to retain the strong momentum of the first half of the year to keep selling new shares in the domestic A-share stock market in the second half the year, according to accounting firm PwC.

The number of initial public offerings (IPOs) by firms seeking to list on the domestic stock exchanges is expected to reach 430-490 and the amount of money to be raised is expected to reach a record high of more than 500 billion yuan (US$77.35 billion) in 2021.

“The A-share IPO market developed well in the first half of the year. The STAR Market [of the Shanghai Stock Exchange] and the Shenzhen ChiNext board became new forces for listing, and the number of A-share IPOs doubled,” said Thomas Leung, markets managing partner with PwC China.

Leung attributed the good momentum in the first half of the year to the rapid and stable recovery of China’s domestic economy and the success of the phased-in introduction of the registration system.

“With the promotion of the 14th Five-Year Plan, favorable policies to assist IPOs and further implementation of the registration-based IPO system, the IPO market will continue to be active in the second half of the year,” said Leung.

The number of IPOs and total funds raised increased significantly compared with the first half of 2020, according to statistics from PwC. In the first six months of 2021, 245 new listings and 210.9 billion yuan in funds raised were up 108 percent and 51 percent year on year, respectively.

There were 70 percent more A-share IPOs issued through the new registration-based IPO system than through the previous system based on regulatory approval. Funds raised in this way were 59 percent higher, according to PwC.

The registration-based IPO mechanism was first introduced in the technology-focused STAR Market on July 22, 2019. The mechanism was expanded to the ChiNext board on the Shenzhen bourse Aug. 24 last year.

Carbon neutrality will be an important driving force in the sustainable development of China’s economy over the next 40 years, and is expected to contribute more than 2 percent to annual GDP growth, said PwC.