Wall Street traders have expressed optimism that the initial public offering (IPO) reforms that China has planned to implement will further bring more foreign investors into the country's stock market.
The IPO reform is set to end the 13-month moratorium on offerings and could change the way firms raise funds in the country's stock market, said Wall Street professionals. Aside from Wall Street, traders and professionals around the world are also closely monitoring the reopening of China's IPO.
One Wall Street professional said the lifting of the IPO ban in China will work out in the end as 700 firms are waiting in the pipeline and about 80 are set to their IPO issuance by the end of January 2014.
A spokesman at the China Securities Regulatory Commission (CSRC) said it would take more than one month to complete preparations, as soon as the IPO freeze is lifted, before the first firm can start its registration process.
The CSRC also announced that 50 firms that have received IPO clearance from the commission should be able to go public starting January 2014.
China had decided to temporarily shut down its IPO window following reports of fraudulent disclosures of listed companies and intermediaries. The CSRC had launched an investigation on the report although the result of the investigation has not been disclosed.
During the Third Plenum of the 18th Communist Party of China Central Committee, Chinese leaders approved plans to reopen the country's IPO window and institute needed reforms.
The new IPO reform will increase transparency of the review process of firms seeking IPOs in the Chinese stock market, the CSRC said.
Also, instead of the usual one year waiting period for companies to receive the result of their application, the CSRC said it will make decisions within three months of receipt of the application documents.