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1st LD-Writethru: Chinese shares advance on Monday after IPO resumption

Xinhua, November 9, 2015 Adjust font size:

China's stocks advanced on Monday after the securities regulator decided to restart IPOs.

The benchmark Shanghai Composite Index rose 1.58 percent to close at 3,646.88 points while the smaller Shenzhen index gained 1.47 percent to close at 12,453.24 points.

Total turnover on the Shanghai and Shenzhen bourses stood at 1.37 trillion yuan (215 billion U.S. dollars), up from 1.17 trillion yuan the previous trading day.

Banks, software companies, and electronic device firms were among the biggest winners. Over 160 stocks on the two exchanges rose by the daily limit of 10 percent.

The China Securities Regulatory Commission (CSRC) said on Friday that IPOs will be restarted with 28 companies allowed to go public before the end of this year.

The announcement came four months after Shanghai and Shenzhen stock exchanges suspended 28 scheduled IPOs in the wake of stock market fluctuations.

The CSRC also said that investors will no longer need to freeze their money for IPO subscriptions before allocations are decided through a lottery system.

Under the previous mechanism, large amount of money would be frozen before every IPO, tying up liquidity.

Restarting IPOs will have limited impact on the market, said Ping An Securities in a report.

Rather, the resumption is more of a signal of the regulator's belief that the market has returned to normal, the report said.

"The early timing for the resumption indicates regulators' determination and confidence to accelerate capital market reform," said Wei Wei, an analyst with Ping An.

The ChiNext Index, China's NASDAQ-style board of growth enterprises, rose 2.37 percent to close at 2,724.62 points on Monday. Endi