Beijing Stock Exchange starts trading with 81 companies

The Beijing Stock Exchange (BSE), which has been highly expected since its September announcement, was officially launched on November 15 with 81 firms, officially adding a third exchange to China's A-share market alongside those in Shanghai and Shenzhen. The BSE is mainly intended to address the fundraising of small- and medium-sized enterprises (SMEs) – the mainstay of China's innovation-oriented economy. A rally in the shares of 10 newly listed firms triggered a temporary trading suspension, with an average surge of 199.8% at the close. The turnover of the 10 firms, in addition to 71 listings migrated from an over-the-counter market, reached CNY9.58 billion. By the close on November 15, the BSE had an entire market capitalization of about CNY289 billion. About 100 shares are expected to trade on the new market by year's end, when the number of investors is expected to top 10 million, 2.5 times the current number. There is a possibility that Chinese shares overseas will join the exchange and it could even revive plans for foreign firms to raise funds on the BSE.

A short opening ceremony was held inside the BSE building in the heart of Beijing's financial street, at which Cai Qi, Beijing Party Secretary and Yi Huiman, Chairman of the China Securities Regulatory Commission (CSRC) rang the BSE opening bell. Tongxin Transmission, a manufacturer of automotive steering shafts based in Henan province, was among the initial 10 new share offerings that all posted stellar gains. Tongxin led the surge with a rally of up to 537.47% intraday. Its shares closed up 493.67%. Shares of 71 firms previously traded on the selection tier of the National Equities Exchange and Quotations (NEEQ), an over-the-counter market known as the New Third Board (NTB), were also transferred to the new exchange, bringing the number of BSE shares to 81, mostly in the fields of pharmaceuticals, software and specialized equipment manufacturing.

The BSE launch marked yet another milestone in the reform and development of China's capital market, Yi said during the opening ceremony, hailing the move as a major policy decision to drive quality development, ramp up financial support for small- and medium-sized enterprises (SMEs) and push for innovation-driven development and the rebalancing and upgrading of the economy. The exchange is poised to become a major platform for innovation-focused SMEs, BSE Chairman Xu Ming said during the opening ceremony. Approximately 40 to 50 representatives from financial institutions, brokerages and enterprises attended the opening ceremony. The speedy availability of the new exchange “beats not only my expectations, but is entirely above market anticipation,” Liu Ping'an, Chairman of GGR Capital, a Beijing-based private equity firm that invests in 14 of the initial 81 BSE shares, told the Global Times.