Beijing Stock Exchange to open with greater expectations for SMEs
Published: Nov 14, 2021 09:33 PM
Beijing Stock Exchange to open on Monday. Photo:Li Hao/GT

Beijing Stock Exchange to open on Monday. Photo:Li Hao/GT

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

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

The opening has received rising expectations and applause from industry insiders, who regard the move as a milestone in enhancing the capital market's services for innovative SMEs. 

The BSE will enhance the function of China's capital market in better serving 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 emerging industries, such as the digital economy, technology and the services 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 bourse.

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

While it is still too early to tell, analysts said that the BSE has great potential for growth, given the good new trials it has conducted and the government's call for supporting the listing and financing of small technology companies.

One highlight of the new trial is that there will be no price limits on the first day of public offerings, and 71 transferred stocks will continue to implement a 30 percent up and down limit, media reports said.

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

The 30 percent price limit is a new effort that can give the market sufficient room for pricing, analysts said.

"While there can also be more risk for investors, the new price limit may ensure the efficiency of price discovery and also offer an indication that the tolerance for limits on rises and falls is getting higher," Lian said.

The broader price range is a requirement for the development of the whole market, and it is likely to expand to more domestic trading markets, Dong Shaopeng, an expert advisor for the China Securities Regulatory Commission, told the Global Times on Sunday.

Ahead of the opening, several brokerage firms carried out a comprehensive upgrade and configuration for doing business on the BSE, such as providing general trading interfaces, quick entrances that are convenient for investors to do transactions on the stock exchange.