The Beijing Stock Exchange, which currently has more than 80 shares, aims to improve access to finance for innovative SMEs. Most of the companies listed on the new exchange are already listed on the NEEQ.
China already had three major stock exchanges: in its economic capital Shanghai (east), in the metropolis of Shenzhen (south) and in its semi-autonomous territory of Hong Kong (south). The country inaugurated a new stock exchange in Beijing on Monday, where more than 80 shares, mainly of innovative SMEs, are currently traded.
The Beijing Stock Exchange aims to provide an additional means of raising funds for SMEs, which often have difficulty obtaining bank loans, especially in the current economic slowdown.
The launch of the Beijing Stock Exchange comes at a time when regulators are cracking down on large technology companies, accused of «disorderly expansion» in recent years.
Local stock exchanges launched in recent years
Most of the companies listed on the new Beijing Stock Exchange are already listed on the NEEQ, an over-the-counter trading platform for SMEs. Launched in 2012, it allows these companies to raise funds before being listed on a major exchange.
Of the 81 companies currently listed on the Beijing Stock Exchange, 71 are from the NEEQ and 10 others have been listed directly.
China has already launched new local stock exchanges in recent years to improve the financing of SMEs, including in 2019 with the «STAR Market», a «Chinese Nasdaq» dedicated to technology stocks.
But the new Beijing stock exchange will, in theory, be able to process listing applications more quickly.
Domestic exchanges favoured because of regulation
However, the long-term success of the stock market «remains to be seen», says Hong Hao, an analyst at Bocom International. «The companies listed on the exchange need to be credible to generate enough interest. Credibility is crucial.»
Since last year, Chinese regulators have been making it more stringent for Chinese companies to list in the US and encouraging them to list on domestic exchanges.