(Bloomberg) — Shanghai’s stock exchange will provide online services over IPO approval meetings, consultations and road shows as half of the city faces a lockdown in turns to stanch a spiraling outbreak in the Chinese financial hub.
The exchange will extend the time window for listed companies’ statement releases to 11 p.m., according to a bourse statement. Companies that had reserved an earlier time slot to release 2021 full year earning can apply to postpone to the April 30 deadline, which is remains the latest date for a release.
The measures are similar to the steps taken in February 2020 amid the initial Covid outbreak to limit in-person meetings and cut paperwork. Policies then also included encouraging telephone and online roadshows and board meetings, as well as postponement of certain releases.
The exchange will also increase support for companies in areas most heavily impacted by the resurgence, and will help firms expedite funding and investment requests. It will offer a “green channel” for bond releases by companies that are seriously hurt by the pandemic and plan to use proceeds for Covid controls or the repayment of due bonds. Similar aid to Hubei province was provided in 2020, when its provincial capital Wuhan was in a city-wide lockdown.
Shanghai, the city of 25 million people, will first lock down areas east of the Huangpu River, which includes its financial district and industrial parks, for four days starting Monday. Then the lockdown will shift to the city’s west for another four days, according to a statement Sunday from the local government.
The online measures proposed by the Shanghai Stock Exchange can “basically ensure the market’s normal operation and participation of all parties,” said Shen Meng, a director at Beijing-based boutique investment bank Chanson & Co. “So in terms of mechanism, it will not have much impact on the market. But Shanghai’s adoption of stricter Covid prevention and control measures may affect investors confidence.”
Read: Shanghai to Lock Down Half City in Turns for Mass Covid Test
Still, disruptions may create additional risks for some Chinese credit investors. If firms are unable to refinance for bond repayments, “more firms may use the grace period to delay payment if they cannot get cashflows due to the lockdown,” said Gary Ng, senior economist at Natixis SA.
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