A-Share Market Undergoes Changes as Regulator Clamps Down On Irregular, Excessive Financing
Xu Wei
/SOURCE : Yicai
A-Share Market Undergoes Changes as Regulator Clamps Down On Irregular, Excessive Financing

(Yicai Global) July 4 -- The A-share market has undergone major changes in terms of new share issuance, refinancing, secondary market trade and increases and decreases of industrial capital, Economic Information Daily reported yesterday citing data from the first half. As initial public offerings became common, the popularity decreased of refinancing and reductions of share capital.

Some 196 listed companies held private placements in the first half, raising USD56.7 billion (CNY384.7 billion) in total. Seven firms pulled in more than CNY10 billion. In the same period last year, 366 private placements raised CNY773.6 billion with 26 convertible bond issuances bringing in CNY29.7 billion.

The China Securities Regulatory Commission announced revisions to terms of the Detailed Implementation Rules for the Non-Public Offering of Stocks of Listed Companies on February 17 in a bid to crack down on irregular, excessive and frequent financing. The new policy was effective.

The number of private placements held fell by 46 percent in the first half, and the amount financed dropped 50 percent. The scale of convertible bond issuances increased 103 percent year-on-year. Institutions expect the convertible bond to become a mainstream refinancing mechanism for A-shares. The A-share market saw a 44.5 percent decline in financing scale in the first half compared with CNY819.2 billion in the same period last year.

In terms of secondary market transactions among important shareholders (major shareholders, directors, supervisors, senior managers and those with a stake of more than 5 percent), listed companies saw a net reduction of share capital of CNY13.5 billion in the first half (calculated from the notice date), a 73-percent decline from the CNY50.5 billion recorded in the same period of 2016.

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Keywords: Refinance , Reduce Shares , A-Share