Smaller businesses encouraged to list on Beijing Stock Exchange

The Beijing Stock Exchange is accelerating efforts to attract listings from more companies and improve market liquidity, as part of its efforts to strengthen its appeal to foreign investors, according to a parallel event at the Annual Conference of Financial Street Forum 2023.

Sui Qiang, general manager of the BSE, said at the Beijing Stock Exchange Roadshow 2023 on Wednesday that it will take the launch of IPOs as the main task and focus on investment-side improvements to better pursue high-quality development.

On Sept 1, the China Securities Regulatory Commission issued a guideline on the high-quality development of the BSE, proposing that it should be built into a first-class exchange with brand appeal and market influence.

"We will help qualified and advantageous companies to make IPOs and be listed on the BSE as soon as possible," said Sui. "In the meantime, we will promote individual investors as well as publicly offered funds, social security funds and other institutions to actively enter the market. The number and types of market entities will also be rapidly increased to improve market valuations and enhance liquidity."

Sui also said that the BSE is committed to developing a full range of index products covering equities, bonds and fund indexes, including those focused on innovative small and medium-sized enterprises and those tracking cross-market performances.

"With all these measures in place, we expect a cluster of high-quality companies to take shape on the BSE and the proportion of individual investors in our market to increase," said Li Yongchun, deputy general manager of the BSE.

"As a result, the level of liquidity on the BSE can be further improved in the near future.

"Some of the measures to be introduced by the CSRC, such as encouraging publicly offered funds to invest in SMEs, will also increase the incentives for institutions to invest in the BSE," Li added.

Li said that currently there are 228 listed companies on the BSE, with a total market value of more than 270 billion yuan ($37.13 billion), and 170 of them are worth less than 1 billion, which means that the BSE is dominated by small and mid-cap stocks.

Among those listed companies, according to Li, more than 80 percent are from strategic emerging or advanced manufacturing industries, mainly covering the fields of industrial materials, information technology, and medical and health consumption.

Li added that the BSE now has more than 6 million individual investors and the market value of the shares held by institutional investors, including publicly offered funds, has exceeded 30 percent of the total market capitalization.

Since May, its average daily turnover rate has exceeded 1 percent, indicating a moderate liquidity condition. At the roadshow, Wellington Global Private Fund Management (Shanghai), a subsidiary of US asset manager Wellington Management, expressed its recognition of the BSE. "We expect to cooperate more with the BSE in the future to better serve the real economy and promote innovation," said Zhang Jiabin, general manager of the company.