In late April, China officially started the #ChiNext’s IPO registration reform, a major step forward for China’s capital market reform. Why is ChiNext’s IPO reform launched at this point?
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No matter from the perspective of the companies seeking to be listed, investors, stock exchanges or even the regulatory authorities, China's capital market, especially the issuance system, has come to a point where there’s no choice but to be reformed.
Faced with #Covid19 pandemic, implementing the registration-based IPO reform will greatly alleviate the financing difficulties of enterprises, especially technology-based SMEs, facilitate their liquidity and the overall development of the real economy.
The reform will attract foreign capital to reevaluate the global asset allocation value of A-shares, reduce recent doubts about the integrity of the financial reporting quality of Chinese listed companies, thereby restoring global investors’ confidence in Chinese companies.
The ChiNext reform has set an important milestone towards a market-based pacesetting of IPOs. In the long run, IPO underpricing will be reduced; opportunities to get listed will no longer be rare; the price of newly issued shares will return to their real value.
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