China’s bulging pipeline of initial public offerings is the single biggest bottleneck in the domestic equity market. It is certainly a critical issue for the nation’s securities regulator, which has made it a priority to deal with the overhang.
However, some specialists say the potential threats have been exaggerated. “Most of these companies are small and the amount they plan to raise is not a lot,” according to Hu Zhanghong, chief executive of CCB International. “In normal days, the market can absorb around 600 IPOs in two years.”
Indeed, based on the 563 companies that have published fundraising plans, the total amount of money to be...
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