China's IPO market to pick up next year

China's Initial Public Offering (IPO) market is expected to pick up next year due to an improving economy and the government's supportive policies.

The report released by the accounting firm Ernst & Young says more small and medium sized enterprises will complete their IPOs in Hong Kong by issue of H-Shares.

An increase in IPO activities for A-shares is also expected as over 800 applicants are currently on the China Security Regulatory Commission's list.

The forecast comes as funds raised through IPOs on the Shanghai and Shenzhen stock exchanges are estimated to hit a three-year low this year.

A total of 154 companies went public on the domestic exchanges in the January-November period, compared with 281 for all of 2011.

For more on this, we are now joined on the line by CRI's financial commentator Cao Can.

1. The number of companies went public over the past 11 months is nearly half less than in 2011. What are the reasons behind the drop?

2. Currently the Securities Regulatory Commission has suspended IPO approvals for two months, and the ban on new share offerings may extend to next February. Once the ban is lifted, will it cause a liquidity problem on the market?

3. One of the biggest problems on the IPO market is that a large number of IPO issuers set their prices very high, leaving investors to carry the losses after the shares began trading and fell heavily. What is the authority likely to do to address the problem next year?