Beijing Stock Exchange Starts Trading

The newly established Beijing Stock Exchange (BSE) began trading Monday, marking an important step in China’s efforts to deepen capital market reform and support small businesses.

Speaking at the launch ceremony, Yi Huiman, chairman of the China Securities Regulatory Commission, praised the launch of BSE as “another milestone in China’s capital market reform and development”.

The launch came just two months after announcing the plan for a new exchange, alongside the two existing exchanges in mainland China – in Shanghai and Shenzhen respectively.

The first batch of 81 companies debuted on Monday, with 10 newly approved and 71 transferred from the selected tier of China’s National Equities Exchange and Quotations, also known as the “new third board.”

At 10:20 a.m., the shares of all 10 newly listed companies had been temporarily suspended twice as their prices rose more than 60 percent. These stocks continued to rise after trading resumed, with the highest rise at any given time of more than 500 percent.

The exchange does not limit the price change of the newly listed companies on the first trading day, but trading is suspended for 10 minutes when stock prices fluctuate more than 30 percent and more than 60 percent.

All 81 companies are top performers in their respective sectors, with sound businesses and strong growth potential, said Li Xudong, chief executive of China Securities.

Li added that 87 percent of these companies come from sectors such as advanced manufacturing, high-tech services and strategic emerging industries, with an average expenditure on research and development of 25.36 million yuan (about 3.97 million US dollars).

More than 95 percent of Chinese enterprises are small and medium-sized enterprises (SMEs). These small businesses are major job creators in the country and an important part of the real economy, but have long suffered from insufficient funding.

“Establishing the BSE is vital for creating a multi-level capital market, enhancing financial support for SMEs and promoting innovation-driven development and economic transformation and upgrading,” Yi said.