CSRC denies companies' capital-raising plans

The China Securities Regulatory Commission (CSRC) has denied plans by at least 34 companies hoping to raise capital through equity markets to repay bank loans and replenish working capital, the Financial Times reported. The companies are concentrated in real estate and industrial sectors Beijing sees as suffering from overcapacity, such as cement. The CSRC’s move comes as officials in Beijing continue to warn of risks of asset bubbles. Regulators are said to be concerned about companies raising capital to pay off existing bank loans, and then taking out even larger loans; new loans reached US$234 billion in January. However, the paper quoted a source as saying that the while the CSRC would likely intervene in and selectively reject initial public offerings, it would not reinstate a moratorium lifted last year.