China to launch new board for growth enterprises in 2016

Beijing, Dec 25 (IANS) China will launch a “strategic emerging industry board” next year to better serve domestic high-growth and innovative enterprises, a senior official with the country’s securities watchdog said on Friday.

“The existing ChiNext startup board is not enough to meet the financing needs of emerging companies as the Chinese economy continues to grow,” Xinhua quoted Fang Xinghai, vice director of the China Securities Regulatory Commission (CSRC) as saying.

The ChiNext is a NASDAQ-style board of the Shenzhen Stock Exchange that tracks growth enterprises. China is witnessing a surge in such enterprises as the government encourages entrepreneurship and innovation.

The creation of the board will diversify financing channels, lower financing costs and help prevent financing risks, Fang said.

“When these companies access financing in the market, they rely less on bank loans. This prevents a concentration of financial risk in the banking system,” he added.

The State Council, China’s cabinet, announced Wednesday that it supports the development of direct financing to reduce production costs for enterprises.

The CSRC and the Shanghai Stock Exchange were discussing the general mechanism and specific rules of the new board to make sure it can accommodate the ChiNext Index.

Competition between the two will be “moderate” according to Huo Da, director of CSRC’s market department.

Establishment of the new board will see progress next year as China works on transforming its IPO approval system into one based on registration, Huo said.

Under current rules, companies have to wait a long time for the CSRC’s approval before listing.

Fang said China is likely to launch a stock connect scheme between the Shenzhen and Hong Kong bourses next year.

The stock connect schemes allow investors to trade on both bourses under a quota and are seen as moves toward a more open capital market on the Chinese mainland.

Leave a Reply

Please enter your comment!

The opinions, views, and thoughts expressed by the readers and those providing comments are theirs alone and do not reflect the opinions of www.mangalorean.com or any employee thereof. www.mangalorean.com is not responsible for the accuracy of any of the information supplied by the readers. Responsibility for the content of comments belongs to the commenter alone.  

We request the readers to refrain from posting defamatory, inflammatory comments and not indulge in personal attacks. However, it is obligatory on the part of www.mangalorean.com to provide the IP address and other details of senders of such comments to the concerned authorities upon their request.

Hence we request all our readers to help us to delete comments that do not follow these guidelines by informing us at  info@mangalorean.com. Lets work together to keep the comments clean and worthful, thereby make a difference in the community.

Please enter your name here