The market capitalization of 194 companies listed on the
Shenzhen small and medium-sized enterprises (SMEs) board surpassed
883.6 billion yuan (120 billion US dollars) as of Dec. 11, more
than four times the level at the end of last year, when only 101
companies were listed.
"The establishment of the SME board in 2004, more than one
decade after the main board of the Shenzhen stock exchange, was
intended to widen financing channels for small and medium-sized
enterprises," Li Feng, a senior equity strategy analyst with China
Galaxy Securities, told Xinhua.
The figures indicate that goal is being achieved.
In 2007 alone, 93 companies were listed on this board, with the
debut of Ningbo Bank yielding the largest proceeds of 4.14 billion
yuan.
From June 16, 2006 to Dec. 11 this year, 146 companies were
listed, a monthly average of eight. This August, during the equity
market’s bull run, 31 SMEs went public, according to Thursday's
China Securities Journal, a newspaper run by Xinhua News
Agency.
Li said the accelerating pace of approval of initial public
offerings (IPOs) helped ease pressure on the mainland's soaring
bourses this year.
The Shenzhen stock exchange, which is still only less than one
fourth of the Shanghai bourse in terms of market capitalization,
has 666 listed companies.
Shenzhen is due to get a NASDAQ-like growth enterprise board in
the first half of 2008. This board is intended to help small
start-ups, especially high-growth, high-tech firms, to raise funds.
Listing thresholds will be lower than the main board.
The Shenzhen exchange represents the efforts by China to build a
multi-tier capital market, which has been rated as a top priority
by the country's top securities regulator Shang Fulin.
The country encouraged large and well-performing overseas firms
and Hong Kong-listed domestic companies to go public on the Chinese
mainland market, according to Shang.
Shang added that China also hoped companies would use the
markets to reorganize their assets. For example, state-owned
enterprises might list part of their operations to diversify their
ownership and fund sources.
The market corrections would continue through the end of this
year, Li said. "But most listed companies still have high earnings
prospects because of positive operational performance and forecast
profit growth."
Li added that strong IPO activity would probably continue next
year on China's exchanges.
Analysts believe that the next wave of IPOs will feature
tourism, catering and department store operators, given rising
earnings expectations for these sectors.
The Shenzhen SME board index gained 1.17 percent Thursday to
close at 5,444.16 points.
(Xinhua News Agency December 21, 2007)
