Major Brokerages Seek Candidates for Shanghai's New Tech Board
Yin Jingfei|Wang Juanjuan
/SOURCE : yicai
Major Brokerages Seek Candidates for Shanghai's New Tech Board

(Yicai  Global) Nov. 29 -- Major players from China's brokerage sector have  started to select companies for possible for listings on Shanghai's  upcoming tech innovation board.

Industry  mainstays such as CITIC Securities, Huatai Securities and China  International Capital expect the first batch of listings to take place  in the first quarter of next year and anticipate that rules will come  out before the end of this year, Yicai Global learned from industry  insiders. 

Shanghai  aims to attract new economy players to list on the high-tech stock  trading board through the city's stock exchange, which will feature less  stringent listing requirements compared with traditional floats.

Industry Heavyweights Take Action

Employees  at a brokerage in eastern China are already anxious to get to work on  drawing up targets for the launch, a company insider told Yicai Global.

"We  have to find candidates from customers that have worked with before  since time is limited," a senior vice president from a brokerage's  investment banking department said. "Regulators have high expectations  and requirements for the first batch of listing companies since they are  part of the test-run for the new board."

Twenty  to thirty companies are estimated to be among the first batch of  enterprises. Investors of potential candidate companies will invite  brokers to carry out due diligence on targets, an insider said.

Brokers  are still unable to sign official contracts with these candidate firms  as the new board's rules are yet to be rubber-stamped and instead they  look to build up mutual trust with potential partners. 

Large  brokers need to seize the market first, according to the insider from  the eastern Chinese brokerage, adding that partners for the first batch  will mostly comprise top investment banks. 

Small and Medium-Sized Brokers Wait to See

Most  small and medium-sized brokerages West China are yet to take action on  projects related to the new board, its investment banker told Yicai  Global.

An  initial public offering project takes about two years to nurture, and  some companies originally preparing for listing on the main or secondary  boards are also eligible for the new board too. The key is whether  investment banks have the right projects, the banker explained.

A  key driver of the positive actions of leading brokers toward the board  is the pressure to seize a leading position in the market. Smaller  players prefer traditional business because concrete details of the new  board remain spare, he added.

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Keywords: IPO , Technology Startups