Shenzhen Stock Exchange Photo:VCG

The first 10 registration-based IPOs in China’s A-share market kicked off trading on Monday, with all newly listed stocks opening high. Electron component distributor CECport surged over 160 percent and oral care products producer Dencare rose near 100 percent at the opening.

The shares continued to rally during morning trading, with gains ranging from 50 to 213 percent as of 11:30 am. Among them, the share price of CECport rallied 211 percent to 37.02 yuan ($5.38), Dencare surged 213 percent to 64.88 yuan, and BOTH Engineering Tech climbed over 120 percent to 25.66 yuan.

On the back of buoyant market sentiment, three among the 10 shares hit their temporary suspension limits within 10 minutes following opening. Shaanxi Energy hit the limit twice. 

According to the new rules, stocks with no limits on price rises or falls will be suspended for 10 minutes if their intraday trading price rises or falls by 30 percent or 60 percent from the opening price of the day for the first time.

The China Securities Regulatory Commission (CSRC) announced to fully implement the registration-based system for IPOs in February. The reform from approval-based system to registration-based system is a change that touches the underlying logic of supervision, and “it is a blade-inward transformation,” CSRC Chairman Yi Huiman said at the IPOs ceremony on Monday.

There are changes in four dimensions, Yi explained.

For starters, it shows the change of philosophy. The new system adheres to the information disclosure as its core, and the regulatory authorities will no longer judge the investment value of enterprises, Yi said.

Secondly, it is the change of the “gatekeeping method” which will be mainly through the quality control of information disclosure, and the issuer will be the first person responsible for information disclosure, he noted.

In addition, transparency will be underscored, and the regulatory enforcement will be stricter, he added.

In the future, the reform of the investment side needs to be intensified. With the promotion of the registration-based system, pensions, social security funds, insurance funds, and others are accelerating their entry into the market, Li Daxiao, chief economist at Shenzhen-based Yingda Securities, told the Global Times on Monday.

It is the threshold for the Chinese stock market to completely step into a new phase of maturity, a new era has arrived, Li said.

Global Times