Beijing Stock Exchange Opens With Greater Expectations For SMBs

The Beijing stock exchange opens on Monday. Photo:Li Hao/GT

Two months after announcing the new exchange at the annual services exchange in Beijing in early September, the highly anticipated Beijing Stock Exchange (BSE) will begin trading on Monday with the active participation of small and medium-sized enterprises (SMEs) and high expectations of market performance.

Driven by active market reactions, the total number of eligible investors will likely exceed 4 million after the stock opens, and this figure is very likely to double within a year, analysts say.

The opening was met with increasing expectations and applause from industry insiders, who view the move as a milestone in improving capital market services for innovative SMEs.

The BSE will strengthen the function of China’s capital market to better serve SMEs, Lian Ping, head of the Zhixin Investment Research Institute, told the Global Times on Sunday, noting that these companies are generally at the top of their game. emerging industries such as the digital economy, technology and the service sectors.

On the first day, 71 listed companies on the selection layer of the New Third Board will be moved to the BSE. In addition, 10 companies that have completed IPOs and other procedures will be listed directly on the new exchange.

The initial transaction volume of the BSE could reach 15-30 billion yuan ($2.4-4.7 billion) according to media reports.

While it’s too early to say, analysts said the BSE has great growth potential, given the good new trials it has conducted and the government’s call to support the listing and financing of small tech companies.

A highlight of the new trial is that there will be no price caps on the first day of public offerings, and 71 transferred shares will continue to apply a 30 percent cap, media reports said.

There is a 20 percent price cap for stocks listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange and ChiNext, and a 10 percent cap for the A-share market.

The 30 percent price cap is a new effort that could give the market plenty of room for pricing, analysts say.

“While there may also be more risk to investors, the new price cap could ensure the efficiency of price discovery and also provide an indication that tolerance for caps for rises and falls is getting higher,” said Lian.

The broader price range is a prerequisite for the entire market’s development and is likely to expand into more domestic trading markets, Dong Shaopeng, an expert adviser to the China Securities Regulatory Commission, told the Global Times on Sunday.

Prior to its opening, several brokerage firms have done extensive upgrade and configuration to conduct business on the BSE, such as providing common trading interfaces, quick accesses convenient for investors to transact on the exchange.