China imposed the ban on IPOs in early July after the country’s stock market lost over 40% in an unprecedented summer rout, halting listing plans for almost 600 firms.
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Deng Ge, the spokesman of the China Securities Regulatory Commission (CSRC), said that it chose to suspend seven institutions from opening new accounts for investors for a month, including China Galaxy Securities and Shenwan Hongyuan Securities Group. The Shanghai Composite climbed 1.9 percent to its highest close in 11 weeks on Friday before the CSRC announcement, taking gains since its August 26 low to 23 percent.
David Morrison, market analyst at SpreadCo, said: “It’s good to hear that China’s regulators are making an effort to restore confidence in the market structure”.
Before the June slump, the index soared more than 150 percent starting late past year after state media said shares were cheap.
July’s order canceled planned IPOs by 28 private companies in electronics, food processing and other industries.
It will take two weeks for the 10 to complete the process, while the remaining 18 will sell shares by the end of the year, Deng said.
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In September, regulators began allowing companies that already were publicly traded to resume raising money through sales of additional shares.
