New listing system will boost stability: expert
Chinese mainland stocks rose on Monday after the country's securities watchdog announced a resumption of IPOs following a four-month freeze.
The benchmark Shanghai Composite Index jumped 1.58 percent to 3,646.88 points, while the Shenzhen Component Index surged 1.47 percent to 12,453.24 points.
The CSI 300 index of the biggest companies traded in Shanghai and Shenzhen rose 1.24 percent to 3,840.36 points.
Turnover reached 1.37 trillion yuan ($215.24 billion) on the two bourses on Monday, up from 1.17 trillion yuan on the previous trading day.
The ChiNext Index, which tracks the country's NASDAQ-style board for growth enterprises, climbed 2.37 percent to 2,724.62 points.
The stock market rise on Monday was mainly due to the good performance of the banking sector, She Minhua, an analyst at Beijing-based Zhong De Securities, told the Global Times on Monday.
Several individual banking stocks climbed by the daily limit on Monday, including China CITIC Bank Corp, Bank of Ningbo Co and China Everbright Bank Co. Industrial and Commercial Bank of China (ICBC), the world's largest bank by assets, rose 3.23 percent to 4.80 yuan, while Bank of Communications advanced 4.70 percent to 6.91 yuan.
Strong performance was also seen by stocks related to the Internet, charging stations for new-energy vehicles and State-owned enterprises. The securities sector declined in afternoon trading, with Guoyuan Securities falling 3.71 percent to close at 25.42 yuan.
She from Zhong De Securities said fluctuations for the securities sector were part of a regular adjustment, as the sector had outperformed the market last week.
"Also, many investors who had previously held a wait-and-see attitude may have come back into the market, which perhaps contributed to the rise," Qian Qimin, co-director of research at Shanghai-based Shenwan Hongyuan Securities, told the Global Times on Monday.
The strong performance by blue chip stocks was also helpful for the market, Qian noted.
Deng Ge, spokesman for the China Securities Regulatory Commission (CSRC), told a regular press conference on Friday that 28 companies will be allowed to go public before the end of this year, according to the Xinhua News Agency.
Along with the announcement of the IPO resumption, the CSRC also announced several measures to improve the current system for new listings.
The previous system required subscribers to pay for a new share in advance. But under the new system, investors will only need to pay after they receive an allotment in the lottery system, according to a statement released by the CSRC on Friday.
"The new system will be very helpful for stabilizing the stock market, as it can help to avoid the risk of money flowing out of existing stocks toward the new IPOs," Qian said. "That's also one of the reasons why the stock market rose on Monday."
The mainland markets performed well last week, with the Shanghai Composite Index rising 6.1 percent to 3,590 points on Friday.
The index has now rebounded by about 20 percent since hitting a low point of 2,927.29 on August 26.
New IPOs were suspended in early July amid sharp fluctuations in the market. But the mainland market has entered a stage of self-restoration and self-adjustment, and the IPO resumption will help encourage a reasonable supply of new shares, the CSRC statement said.
"The restart of IPOs will not change the upward trend in the stock market," She from Zhong De Securities noted.
The market is expected to keep the upward trend at least in the first half of this week, She said.
In Hong Kong, the Hang Seng Index declined 0.61 percent to 22,726.77 points on Monday.
Shares in investment bank China International Capital Corp surged 1.28 percent to HK$11.04 ($1.74) in its market debut on Monday.
