Shenzhen Stock Exchange
Shenzhen Stock Exchange (SZSE) is the second largest stock exchange in China, and the first to be established by a Chinese government. Founded in 1990, the exchange currently trades both stocks and bonds, and is currently the world’s sixth largest exchange by market capitalization.
SZSE’s main focus is trading of equities and bonds. It is made up of two markets, the main board and the Shenzhen Stock Connect. In the main board, the exchange trades both primary and secondary issues of companies listed in A-share and B-share markets. Meanwhile, Shenzhen Stock Connect allows investors to trade mainland China-listed stocks and bonds, while providing access to international investors.
The exchange also trades in exchange-traded funds (ETFs), structured products, options and other derivatives.
Equities listed in the Shenzhen Stock Exchange include blue-chip stocks and securities of small and medium-sized enterprises (SMEs). SZSE Companies are required to have a minimum market capitalization of RMB1 billion (or its equivalent in foreign currencies) and a turnover of more than RMB2 billion (or its equivalent in foreign currencies). The exchange has adopted a stringent listing system which helps to protect investor interests.
As of April 2021, the market capitalization of the Shenzhen Stock Exchange was over RMB30 trillion.
In July 2020, the SZSE and Hong Kong Stock Exchange (HKEX) launched the Shenzhen-Hong Kong Stock Connect. The scheme allows investors based in Hong Kong to trade in Mainland China-listed stocks, while also giving Mainland investors access to Hong Kong-listed securities.
Unlike the Stock Connect scheme initiated by the People’s Bank of China (PBOC) in 2014, the new Shenzhen-Hong Kong Stock Connect does not require international investors to open a separate account with the PBOC. This makes the scheme more attractive to foreign investors.
SZSE is making efforts to enhance its regulatory framework, market infrastructure and investor protection. It has adopted the registration-based IPO system to reduce listing requirements, as well as introducing a range of new trading services and products.
In an effort to further encourage foreign investors to participate in the SZSE’s market, the exchange has established regional offices in New York, Frankfurt, Frankfurt, Tokyo, Hong Kong, Seoul, London and Singapore.
The Shenzhen Stock Exchange is committed to providing a transparent and fair marketplace for investors of all kinds. With its stringent listing standards, strong investor protection mechanism and innovative products, it is poised to become the leading exchange in China.
