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China $9 billion IPO plans stalled amid COVID outbreak

by Mike Robinson

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© Reuters. FILE PHOTO – A sign for STAR Market in China, China’s first tech board is shown before listing of the first companies on Shanghai Stock Exchange (SSE), Shanghai, China, July 22, 2019. REUTERS/Stringer

SHANGHAI (Reuters). Several Chinese companies are halting domestic listing plans. The filings reveal that the nation’s worst coronavirus infection in 2 years has impeded due diligence and information collection, resulting in an estimated $9Billion in funding.

One week ago, fifteen companies applying for initial public offerings (IPOs), on Shanghai’s tech-focused STAR Market, were suspended. Most of them cited the impact of the epidemic. On Monday, the city began locking down.

After three rounds of testing mass in Shenzhen in March, 67 applicants to IPO have suspended the process. They cited the need for regulators to be updated, as per filings.

According to Securities Times, the suspension can delay raising funds worth 60 billion won ($9.43 trillion).

The Shanghai Stock Exchange pledged to minimize the virus’s impact by ensuring that capital markets continue to operate during this “special” period of virus control.

Sunday’s announcement by the bourse indicated that they would continue to examine share-sale plans from STAR Market candidates, and will strengthen online communications between issuers/underwriters.

($1 = 6.3602 renminbi)

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