China's A-share market started falling steadily in May last year, and the benchmark Shanghai Composite Index fell to below 2,000 points in November 2012, hitting a five-year low.
Although it seems that the securities sector has hit rock bottom, analysts said that this offers the regulator a good opportunity to implement reforms, which could revive the stock market in 2013.
"A deep reform of the stock market, including the IPO pricing system, is urgently needed," Tu Chunhui, general manager of the research department at China Development Bank Securities, told the Global Times Tuesday.
Deep reform needed
"Chinese IPOs tend to be overpriced in the primary market, especially for the NASDAQ-style Growth Enterprises Board, which can lead to losses in the secondary market," Tu said, adding that by keeping the opening price more reasonable, the price gap between the primary and secondary market will be smaller.
Some small-sized companies that don't have potential for robust growth often see their profits drop after getting listed on the stock exchange, which is another cause of the staggering stock market, Tu noted.
Over one third of the 155 firms which launched IPOs on mainland boards last year experienced a drop in profits in the first three quarters, with 28 seeing their profits decline by over 20 percent year-on-year during the period, according to Wind.
Girl wearing "military uniform" parade on the street to publicize the new traffic regulation
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