China Stock Exchange for Entrepreneurs kicks off in Beijing
Beijing A stock exchange set up in the Chinese capital to serve entrepreneurs opened trading on Monday with 81 companies amid a crackdown on tech giants that wiped out more than $1 trillion of their market value overseas.
The Beijing Stock Exchange joins other mainland exchanges in Shanghai and the southern city of Shenzhen. Most are off-limits to foreign investors, but some companies have shares that are traded in Hong Kong, a separate Chinese region open to global capital.
The ruling Communist Party has promised more support for entrepreneurs who are generating wealth and jobs but tightening their control over technology companies. They are under pressure to invest their money in the plans of the industry in Beijing.
President Xi Jinping said in September that the Beijing Stock Exchange would “create a service-oriented and innovation hub for small and medium-sized businesses,” the ruling party’s term for private companies.
Chinese stock exchanges were set up to raise funds for state-owned enterprises, which prompted entrepreneurs to go abroad for capital.
Investors are uneasy about the situation for entrepreneurs in China after the ruling party tightened its control over technology companies by launching security measures and other crackdowns last year. Investors have paid out more than $1 trillion in value for Tencent Holding and other tech giants on Wall Street and the Hong Kong Stock Exchange.
The Beijing Stock Exchange will accept smaller companies and wider price fluctuations than in Shanghai or Shenzhen, according to state media.
After the first day, prices will be allowed to fluctuate with a daily limit of 30% before trading is suspended. The Shanghai and Shenzhen stock exchanges are somehow 10% for the main exchange and 20% for the boards of small, high-tech companies.
On Monday, Henan Tongxin Transmission Co., Ltd. , the industrial parts manufacturer, increased just over 500% in its first market debut. Most other companies, many of which have moved from other exchanges, rose or fell, by single-digit margins.
The Beijing Stock Exchange has not yet announced an index to track the overall market movement. This name presents a potential challenge: BSE is already used by major stock and indexes in India.
Shenzhen added a separate commercial board in 2004 for private companies. Shanghai added a board of directors for technology companies in 2019.
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