1st trading week of Beijing Stock Exchange meets expectations with 340,000 new investors coming online
Published: Nov 21, 2021 09:57 PM
Beijing Stock Exchange to open on Monday. Photo:Li Hao/GT

Beijing Stock Exchange Photo:Li Hao/GT

The first trading week of the newly launched Beijing Stock Exchange (BSE) from Monday to Friday has overall met market expectations with additional 340,000 qualified investors rushing into the bourse, statistics showed.

The cumulative turnover in the first five trading days totaled at more than 21 billion yuan ($3.29 billion). The market volume was significantly boosted in the past week on investors' rising enthusiasm about the exchange, a third addition to China's A-share market.

The prices of 10 new stocks all rose more than 50 percent from their offering prices and the 71 listings that migrated from an over-the-counter market also performed well.

Shares of Henan Tongxin Transmission Co saw the largest daily rise of 493.67 percent among all stocks on Monday, the first trading day.

In the initial stage, the market operation of BSE was relatively stable, which also laid a strong foundation for the long-term development of the market, a senior investor surnamed Cheng based in Shanghai, who is also an independent market observer, told the Global Times on Sunday.

"It is easy to find that institutional investors occupy the majority of the BSE - a market with pilot registration system. Their investment mode is more likely to be long-term and rational, which will grow with the increase of high-quality assets, thus will form a better shape for the market," said Cheng.

After the first-day surge, the trading of shares, especially 10 new shares, tended to be more rational while keeping the overall upward trend. 

For example, shares of Tongxin Transmission saw a 13.09 percent drop on Tuesday and 17 percent drop on the third trading day after soared nearly five times on the first day. On Friday, its shares closed up 333.13 percent compared with its opening price on Monday.

About 100 shares are expected to trade on the new market by the year's end and trade-eligible investors are slated to top 10 million, 2.5 times the current number, according to market participants, envisioning the possibility that the new exchange will welcome overseas-listed Chinese shares and even revive plans for an international board for foreign firms to raise funds.

The first group of eight BSE funds, which started trading on Friday, were all sold out by noon the same day, with the total subscription volume exceeding 8 billion yuan.

"On the whole, the BSE has achieved good results in the first week of its opening," Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times on Saturday.

"It is expected that with the number of listed companies on the BSE on the rise in the future, its development will also become more stable," said Yang.

In terms of valuation, market is expected to have a shorter time to digest the high valuation of new shares listed on the BSE due to their high trading prices and relatively high proportion of tradable shares in the early stage. These new shares need to be tracked closely as institutions are looking for undervalued timing to buy, a manager of a private equity, who refused to be named, told the Global Times on Sunday.

Merely 75 days after being announced, the BSE's launch reflects the "imperative" to address fundraising challenges for small- and medium-sized enterprises (SMEs) - the mainstay of China's robust economy.