Chinese markets slip on IPO reforms

<p>IPOs are to be resumed in China.</p>

Chinese stock markets fell today (December 2nd) after it was announced that initial public offerings (IPOs) will be enabled once more from next year.

The Shanghai stock index dropped by one per cent following the news, while the Shenzen stock index fell by four per cent.

Zhang Yanbing, an analyst with Zheshang Securities, explained there are concerns allowing IPOs again could "divert funds from the secondary market".

Despite this, Mr Yanbing added that the rules "should be positive to the market in the long run".

The China Securities Regulatory Commission published the new guidelines as part of its ongoing reform to the country's stock markets.

Luke Wang, a vice-president at China Galaxy Securities, stated that once the new guidelines come into effect, "the IPO issuance process will speed up massively".

Major Japanese index the Nikkei was also down in trading today, but the market only slipped by 0.04 per cent over the course of the week's opening session.

Learn about the Asian markets and CFD trading at City Index

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.