EL7 Research · China and Emerging Markets
Tuesday 3 November 2026 · Shanghai Stock Exchange closing prices on 3 November
Reuters cited the Financial Times as reporting that China's securities regulator had asked banks to halt new IPOs and sales by major shareholders, in a report yet to be officially confirmed. Meanwhile, the central bank is funding stock buyers through a facility for which 31 institutions have submitted applications exceeding 100 billion yuan. EL7 data show that slowing IPOs alone in 2023 did not halt the decline, and that the trend changed only when money reached buyers.
Reuters on 3 November cited the Financial Times as reporting that the China Securities Regulatory Commission (China Securities Regulatory Commission, CSRC) had asked investment banks to halt initial public offerings (Initial Public Offering (IPO)), the sale of a company's shares to the public for the first time, and suspend large sales by existing major shareholders until the market recovers. The newspaper cited three people familiar with the discussions and said the regulator had informed banks through informal guidance (Window Guidance), meaning verbal instructions from the regulator to institutions without a written decision. Reuters said it could not immediately verify the report, and Chinese regulators did not respond to requests for comment.
The report followed the worst month since early 2016 for the CSI 300 index of the 300 largest mainland-listed companies, which fell 8.5% in October, according to Reuters. In EL7 data, the Shanghai Composite index (Shanghai Composite), which includes all stocks listed on the Shanghai Stock Exchange, fell 6.33% in the same month and closed on 30 October at 3,599.02 points, its lowest close since 4 August 2025.
On 2 November, the People's Bank of China and regulators announced a support package that funds buyers. It includes a third round of the swap facility that allows brokerages, funds and insurers to obtain liquid securities (Liquidity), meaning securities that are easy to buy and sell without significantly affecting their price, to buy stocks. Applications from 31 institutions exceeded 100 billion yuan. The package also makes the relending programme for share buybacks permanent, while cutting its interest rate from 1.25% to 1%. The Shanghai index rose 1.08% that day, then fell 0.82% on 3 November to 3,608.10 points, while the STAR 50 technology stock index fell 3.81%.
Beijing is therefore acting on both supply and demand: the supply tap, meaning new shares that draw investors' money away from existing shares (Shares Outstanding), the total company shares held by investors. And the demand tap, meaning the money available to buy stocks. EL7 data test a recent precedent: when the regulator announced a slower pace of IPOs on 27 August 2023 and stamp duty on trading was halved, the Shanghai index fell 12.79% over the following five months through 5 February 2024. The trend changed only when money arrived: the index rose 3.23% on 6 February 2024 after Central Huijin announced expanded purchases of index funds, funds that track a specific index, then 26.95% over six sessions after the central bank's package on 24 September 2024. Freezing IPOs alone does not lift the market; the question is how much money will reach buyers.
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