Trading begins on new Beijing Stock Exchange
Over 80 companies started trading on the Beijing Stock Exchange.
BEIJING (AFP) - A new Chinese stock exchange focused on SMEs began trading in Beijing on Monday, boosting support for smaller-scale firms as economic growth slows and Beijing cracks down on domestic tech giants.
Over 80 companies started trading on the Beijing Stock Exchange, which is expected to complement two main bourses in Shanghai and Shenzhen by catering to smaller enterprises that have long faced difficulty getting funding from banks.
Chinese media reported Monday morning that a number of new stocks on the exchange rose over 30 percent from their opening prices, going beyond a cap set on daily trading.
The limit on trading fluctuations is 30 percent, although state media earlier reported that there would be no limit on the first day of listing.
The move follows the 2019 launch of a Nasdaq-style board focused on science and technology listings on the Shanghai Stock Exchange.
The opening of the new exchange comes as authorities move to develop the country’s capital markets amid slowing economic growth.
It also comes as Beijing clamps down on tech giants in a bid to stem the sector’s aggressive growth, data misuse and alleged monopolistic practices.
The Beijing exchange provides a capital-raising conduit for SMEs and takes in companies on the top tier of China’s existing National Equities Exchange and Quotations (NEEQ), founded in 2012.
The NEEQ is an entry level, over-the-counter stock trading platform allowing firms to raise funds before listing on a stock exchange.
Seventy-one companies from the NEEQ -- or "New Third Board" -- were transferred to the Beijing exchange and 10 others were listed directly.
The Beijing exchange’s rules allow it to process listing applications more quickly than some other boards.
Hong Hao of financial services firm Bocom International told AFP that the exchange’s long-term success "remains to be seen".
"You need to have credible companies to be listed on the exchange, to generate enough interest," he said.
Many Chinese companies including giants like Alibaba and Baidu have in the past listed on the more developed US exchanges.
But Beijing has been pressing companies to instead list on home soil, as Chinese firms hoping to trade shares in the United States face heightened scrutiny from regulators as the economic and tech rivalry between the two countries deepens.
But Hong Kong remains a more likely location for large Chinese companies seeking to list outside the country’s mainland, observers note.
