China's securities regulator said on Friday that it will resume initial public offerings by companies after halting the fundraising mechanism since July to stem the dramatic market slide during the summer.

The China Securities Regulatory Commission's move came as the benchmark Shanghai Composite Index had rebounded by 20 percent from the low in August following a rout that wiped out $5 trillion in market value.

The decision was widely regarded by analysts as a timely and positive move to restore the financing function of the stock market, which will benefit the country's economy overall.