(MENAFN- BreezyScroll)
During a crackdown on internet titans that has wiped more than $1 trillion off their market value abroad, a stock exchange set up in the Chinese capital to assist entrepreneurs commenced trading Monday with 81 companies. The Beijing Stock Exchange joins the Shanghai Stock Exchange and the Shenzhen Stock Exchange in mainland China. They are generally shut to foreign investors. However, certain companies' shares trade in Hong Kong. There is a separate Chinese colony open to international finance.
The Communist Party is in power in China. It has promised increased backing for entrepreneurs who create money and jobs while tightening control over technology corporations. They are under pressure to put their own money into Beijing's industrial plans.
In September, President Xi Jinping stated the Beijing exchange will“establish a service-innovation-oriented core position for small and medium-sized enterprises,” as the ruling party's euphemism for private businesses.
Chinese stock exchanges came into being to attract funds for state-owned enterprises, prompting entrepreneurs to seek funding from outside.
After the ruling party tightened control over tech companies by initiating data security and other crackdowns last year, investors are concerned about the position of China's entrepreneurs. On Wall Street and in Hong Kong, investors have slashed the value of Tencent Holding and other tech behemoths by more than $1 trillion.
More about Beijing Stock Exchange
According to state media, the Beijing exchange will accommodate smaller enterprises and bigger price swings than Shanghai or Shenzhen.
Prices will fluctuate by a daily limit of 30% after their first day before trading goes off. The big bourses in Shanghai and Shenzhen are 10% one way or the other; while their high-tech and small company boards are 20% one way or the other.
Henan Tongxin Transmission Co. is a manufacturer of industrial parts. It rose by well over 500 percent on its first day on the market on Monday. The majority of other firms, many of which transferred from other exchanges, climbed or declined by single-digit margins.
The Beijing Stock Exchange is yet to announce an index that will reflect the market's overall movement. The name could be a problem because BSE is already used for India's main exchange and indexes.
In 2004, Shenzhen established a separate trading board for private businesses. In 2019, Shanghai established a board for technology businesses.
Beijing Stock Exchange China entrepreneurs
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