President Xi Jinping announced the Beijing-based exchange at an international trade fair on Thursday, saying that he wanted to create a venue for “service-oriented” and “innovative” businesses. The date of the establishment of the exchange was not stated by him.
China has already two stock exchanges. However, they are in Shanghai and Shenzhen far from Beijing. Established in 1990, the Shanghai Stock Exchange hosts large-cap companies. This includes state-owned banks and energy businesses. There is a greater number of small and medium-sized tech firms on the Shenzhen Stock Exchange.
This move is coming as China’s crackdown on large companies and their regulatory efforts intensify. Beijing has worked for almost a year in order to restrain their power and influence.
This is the second occasion Xi personally announces a stock exchange initiative. 2018 saw the following:The US-China Trade War raged, he unveiledA tech-focused board to support startupsThe Shanghai Stock Exchange. TheCreation of the Star MarketIt was created to attract investment and give China an advantage in the West’s tech sector. More than 300 technology companies have been listed on the board since then. The total market capital is more than 4.7 trillion Yuan (728 billion).
In Beijing, the government established an over-the counter system for trading shares in companies that are not listed in Shanghai and Shenzhen in 2013. The National Equities Exchange and Quotations (NEEQ) is its name. It’s widely known in China as the “New Third Board”. The NEEQ, which has been shrinking in liquidity and size in recent years, is still behind Shenzhen and Shanghai markets. Thursday’s speech by Xi was a pledge to reform the NEEQ.
China Securities Regulatory Commission, the nation’s highest securities regulator, explained later that the Beijing stock exchange would be constructed on top of the NEEQ. Select companies in the NEEQ may be eligible for funding.You must be eligible to list on Beijing’s exchangeThe regulator was added.
The CSRC stated that the Beijing stock exchange would complement Shanghai’s Shenzhen exchange and will focus on small- and medium-sized business innovation.
It said that the registration-based IPO (registration-based IPO) system China used in Shanghai will also be applicable to any company wishing to list on this new exchange. This system will require companies to disclose more information about their operations. This system is intended to increase market transparency and shorten the regulatory review of IPOs.
Publited Fri, 3 Sep 2021 at 05:50.13 +0000