China’s stock regulator is set to stop allowing local companies in certain sectors to list on the country’s main stock exchanges as Beijing works to channel funding into strategic industries, according to two capital markets bankers familiar with the matter.
The regulator has told some bankers that it has given several industries, including food and beverage chains and Covid-19 testing companies, a “red light” status that makes them off-limits to equity financing on the main boards in Shanghai and Shenzhen.
The China Securities Regulatory Commission also outlined a number of “yellow light” sectors, such as apparel and furniture, where initial public offering requests could come under heavy scrutiny if their growth relies heavily on debt for expansion.