No thaw in sight for China IPO freeze As the freeze on new equity market listings in mainland China marks its one-year anniversary this weekend, analysts and bankers now expect it to continue for a further six months. Chinese regulators have blocked all initial public offerings since last year in a bid to help revive the fortunes of companies already listed. Authorities fear that a flood of new issues would sap liquidity from an already fragile equity market. IN Asia-Pacific Equities The freeze has also been used as an opportunity to clear up the backlog of companies seeking to list, which reached almost 900 at its peak. About 270 candidates have withdrawn their applications after regulators demanded fresh financial background checks on those seeking an IPO. The continued equity market lockout has forced many prospective listing candidates to turn to other sources of capital, such as the shadow banking system, and has left private equity investors without their favoured exit avenue. Equity investors have complained that the shutdown has limited their opportunities to buy into the new drivers of growth, such as technology and consumer stocks. In spite of repeated calls for the market to reopen, analysts are doubtful that any change is imminent. I'm surprised they haven't started it up again. It's not good," said Francis Cheung, head of China strategy at CLSA, who does not expect IPOs to resume for another six months. Ultimately, it will be a problem for a lot of Chinese companies - it is a major way for them to raise capital. In the meantime, a lot of companies will move to Hong Kong or Nasdaq. Chinese companies have had 40 IPOs worldwide so far this year, raising $8.3bn, according to Dealogic. But these listings have all taken place in Hong Kong and New York, plus one in Malaysia. Although economic data have recently shown signs of improvement - manufacturing activity hit an 18-month high in October - the performance of China's main equity market remains sluggish. The Shanghai Composite is down 5.5 per cent this year, and hit a four-year low in late June. "They're trying to pick a perfect moment, when the market is not too high and not low," said a senior executive at a Chinese brokerage. When it does happen, it will be a controlled opening of the IPO market. He said he had met with regulators and believed the opening will come in February or March. China Securities Regulatory Commission has routinely given the same answer at regular news conferences, saying that the regulator was working on perfecting the issuing mechanism to ensure that it operates better and the interests of small investors are protected.