A rocky restart to IPOs

Chinese shares nosedived to a five-month low on Monday, calling for effective regulatory measures to fix the languishing stock market. And the ongoing reform of initial public offerings (IPOs) to mend a market in which a regulator-guided pricing system failed to prevent consistently excessive offering prices is surely one of them.

While the regulatory authorities are doing their best to ensure a successful restart for IPOs as early as this week, they should not underestimate the worries of Chinese investors. On the domestic front, the one-third drop in the Shanghai Composite Index in the past four years forced many investors to reconsider their decision to invest in stocks when property prices are shooting through the roof despite repeated government warnings.

Globally, the 6.8 percent drop in the Shanghai benchmark index was enough to make it the worst performing market in Asia last year, when US shares were hitting record highs.