China Stock Market Dysfunctional Amid IPO Halt, Neoh Says
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China’s equity market has become “dysfunctional” after the regulator halted share sales and investors shifted to wealth-management products, said Anthony Neoh, a former government adviser who helped the nation open up to foreign money managers a decade ago.
Smaller companies are losing access to capital as the China Securities Regulatory Commission extends a more than nine-month halt on initial public offerings and government-controlled banks focus on lending to state-owned enterprises, said Neoh, who helped start the Qualified Foreign Institutional Investor program as the CSRC’s chief adviser from 1999 to 2004. Many investors assume wealth-management products are guaranteed by the government, creating “tremendous moral hazard,” Neoh said.