China said to consider suspending IPOs amid plunge in stocks

An investor looks at an electronic board showing stock information at a brokerage house in Shanghai on June 16, 2015.
An investor looks at an electronic board showing stock information at a brokerage house in Shanghai on June 16, 2015.PHOTO: REUTERS

BEIJING (BLOOMBERG) - Chinese regulators are considering suspending initial public offerings to stabilize the country's tumbling stock markets, according to people familiar with the matter.

The China Securities Regulatory Commission is meeting this afternoon with major brokerages, said another person, without saying what will be discussed. The people asked not to be identified as the regulator's deliberations are private.

CSRC officials didn't immediately respond to a faxed request for comment.

Any move by the CSRC would come on top of the central bank's interest-rate cut on the weekend, which was viewed by some analysts as a move to curb declines that have dragged Chinese stock markets into a bear market. The Shanghai Composite Index dropped 3.3 per cent on Monday, taking declines from its June 12 peak to more than 22 per cent.

Suspending initial share sales would head off any diversion of funds into the new listings. Subscriptions for 28 upcoming IPOs on the mainland may tie up 4.03 trillion yuan (S$875.8 billion) of liquidity starting early July, according to the median estimate of six analysts surveyed by Bloomberg.