China’s IPO gamble could backfire

A brief rally followed by another tumble would damage China's market-management credibility further. Yet history suggests that is what may happen.

China’s push to reassure investors of the regime’s reformist credentials by swiftly lifting its ban on new company listings could yet backfire.

The moratorium on initial public offerings was imposed in July as part of a massive state-led effort to prop up China’s domestic stock market as shares juggered downwards in disorderly fashion.

The China Securities Regulatory Commission's move on Friday to restart IPOs so soon afterwards has surprised stock market analysts and investors alike as prices still look expensive and divorced from fundamentals.

The benchmark Shanghai Composite index is up 23% since the end of August, despite the latest economic data...

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