Market access

China offers easier access to capital market for companies affected by Covid

Pandemic-hit Chinese companies will be offered easier access to its capital markets as Beijing tries to boost its Covid-hit economy.

Chinese regulators have also urged brokerage firms and fund managers to channel more money to virus-hit areas and sectors.

And the China Securities Regulatory Commission (CSRC) also promised greater regulatory flexibility if companies cannot sign documents or meet with financiers in person due to pandemic restrictions.

Also on AF: HSBC banker slams ‘sharp’ climate risk warnings

China is grappling with the biggest Covid-19 outbreak in two years, with full or partial shutdowns in cities like Shanghai hitting consumption and production, and raising the prospect of an economic recession.

The CSRC urged stock and futures exchanges and other institutions to “make strong efforts to help businesses weather the pandemic.”

The CSRC said profitability requirements will be lowered for virus-hit companies when vetting initial public offerings (IPOs), as long as applicants’ operations are deemed sustainable.

Meanwhile, the process for applying for refinancing, bond sales and asset purchases will be expedited for sectors affected by Covid.

The CSRC encourages brokerages to help

Regulators will also allow companies to use electronic signatures when applying to issue securities and extend the processing time for regulatory inquiries.

The CSRC also urged brokerages to underwrite more stock and bond sales for companies affected by the virus and to avoid margin calls as much as possible.

For mutual fund companies, the CSRC urged them to actively use their own money to buy funds and channel more private capital into virus-fighting companies.

Regulators will also speed up the approval of anti-virus fund products, the statement said.

  • Reuters with additional editing by Sean O’Meara

Read more:

China cuts benchmark mortgage rate to support economy

Shanghai’s factory, retail and real estate sectors pulverized by lockdown

Sean O’Meara

Sean O’Meara is an editor at Asia Financial. He has been a newspaper man for over 30 years, working for local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. Passionate about football, cricket and rugby, he is particularly interested in the financing of sport.