Analysts: Listing reform to lead to healthier market

BEIJING, May 31 -- China has decided to resume
Initial Public Offerings, or IPOs, as early as June. In a short trading week
before the holiday, the stock market shrugged off a slight fall on the back of
the news. Analysts say the listing reform will lead to a healthier market.

Chinese stocks ended 1.7 percent up on Wednesday.
Shares rounded off May with their third largest monthly gain so far this year.
For this month, Chinese stocks were up 6.3 percent. The market has recorded a 40
percent gain so far this year. Though the IPO news dampened the market to a
3-week low this week, but it only had a limited impact.

Huang Yongdong, Securities Analyst said "Concerns
that the new offerings will divert funds from the secondary market are
legitimate."

Some have doubts about the timing of the IPO
resumption and fear the return of IPOs will end the rally this year. But
analysts say the decision makes sense.

Huang Yongdong said "It is a signal."

Analysts added most of investors chasing new shares
are speculators, hoping to benefit from the huge price gap between primary and
secondary markets. Reform against public listings will help the market run more
rationally. It will also encourage retail investors' participation and help
reduce stocks' premiums to the IPO prices on the first trading day.

(Source: CCTV.com)


Plan to resume IPOs won't restrain
market's long-term performance


BEIJING, May 26 -- China's intention to resume new share sales may slow market
gains in the short term but analysts said the macro economy is the key factor
that will determine the market trend.

"The market is very likely to enter a short-term
fluctuation due to the resumption of initial public offerings, but for the long
term, the liquidity in the market is still adequate and the domestic economy
will improve," said Li Bin, an analyst at Guolian Securities Co.