PR95488

SHENZHEN, China, Apr. 15, 2022 /PRNewswire=KYODO JBN/--

The capability of China's stock market to serve the real economy was improved

last year with the implementation of the registration-based initial public

offering (IPO) system, according to a report recently released by Peking

University, HSBC Business School (PHBS) Think Tank. The report studies

characteristics of initial public offering (IPO) and refinancing, and the

relevant policies and systems of the Chinese equity market, as well as the

remaining problems in 2021.

Compared to previous years, it finds that the proportion of IPOs of industrial

companies has increased 6.3%. In addition, the second-board markets (ChiNext

and Sci-Tech Innovation Board) have provided more financing support for small

and medium-sized private enterprises (SMEs), especially those in the

industrial, materials, IT, and healthcare sectors. All of these imply growing

support in the capital market to serve China's real economy.

In addition, the newly-established Beijing Stock Exchange (BSE) marks a key

step in China's efforts to deepen capital market reform, according to the

report. Of the first batch of 81 companies listed on the newly-established

(BSE), 78 % are SMEs in advanced manufacturing, modern services, high-tech

services and strategic industries. Based on this, the report suggests that the

BSE is playing a significant role in stimulating the direct financing of SMEs

in the National Equities Exchange and Quotations, further enhancing the

financing capability of China's multi-level capital market.

However, due to mixed pressure from refinancing, financial fraud, ineffective

regulation, and irrational speculators, China's stock market is still dealing

with multiple challenges to attract medium and long-term funds, according to

the Think Tank. Researchers suggest that an effective issuance system, a

transaction system, and a transparent regulation need to be implemented. For

instance, the efficiency of the registration-based IPO system requires highly

transparent information disclosure and proactive financing regulation.

Effective policies to attract long-term capital and improve risk management are

needed to curb the irrational speculation of both individual and institutional

investors and ensure sustainable development of the equity market.

Source: Peking University HSBC Business School