China’s regulator: delistings will not ‘increase significantly in the short term’
- Since the beginning of this year, 169 companies have been marked as having potential financial issues or face the risk of delisting, versus 164 in all of last year
China’s securities watchdog said its moves to raise the bar for initial public offerings (IPOs), expel unqualified firms from stock exchanges and exercise greater scrutiny over high-frequency trading are ensuring the “survival of the fittest” although it does not expect delistings to “increase significantly in the short term”.
Since the beginning of this year, a total of 169 companies listed in Shanghai and Shenzhen have been marked as having potential financial issues or face the risk of delisting because of chronic financial problems. This compares with 164 in 2023, 184 in 2022, and 202 in 2021, according to an official.
The comments emerge after investors sold small-cap stocks amid concerns that heightened scrutiny from China Securities Regulatory Commission (CSRC) could eliminate smaller companies.
“The CSRC (China Securities Regulatory Commission) attaches great importance to investor protection work related to delisting, and insists on ‘pursuing to the end’ the illegal and irregular behaviours of the above-mentioned entities,” said a notice from the watchdog on Thursday.
The CSRC said earlier this year it will weed out unqualified IPO candidates to fundamentally improve the quality of public companies, as well as to deliver better returns for investors.
In the past month, more than 30 A-share stocks that were assigned “ST” or “*ST” statuses saw their prices decline for over 15 trading days, with a few falling under 1 yuan (US$0.14) per share, according to data compiled by Wind.
