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President Zhu Congjiu of the Shanghai Stock Exchange (SSE) spoke at the "Sino-French Fund Summit Forum" that the SSE predicted its stock trading volume at RMB24 trillion this year, accounting for 22% of the total of the Asian market. It will further impel the development of the market in three aspects.
The first task is to continually encourage and promote listing of more enterprises; the second is to implement the comprehensive strategy of co-development of the stock, bond and derivative markets; the third is to develop more tradable products.
As for new products' development, Zhu said that the SSE attached great importance to development of the real estate investment trusts. "If investors are provided with investment products related to real estate, they will have the opportunity to participate in and share the price growth of real estate. Meanwhile, the risks of purchasing power caused by soaring of real estate price will be dispersed." At the same time, in line with the market requirements, the SSE will successively launch some ETF products based on sector and industry indices.
According to Zhu, the current market development faces a practical problem, namely, the expansion of market depth, which is the signal for market maturity and the foundation of economic development. So, the SSE will encourage more enterprises to make full use of the capital market and attract more capital to invest through the capital market. Besides, it will continue to improve corporate governance and enhance investors' orientation. Moreover, it will implement stricter supervision, especially supervision over information disclosure of listed companies, to instruct listed companies' pursuance of real and reliable transparency. Zhu also added that further improvement of listing and delisting systems should also be considered earnestly.
According to Zhu, so far, the market capitalization on the SSE has reached RMB21.5 trillion, exceeding the total GDP. Among the SSE-listed companies, 5 companies' market capitalization has outnumbered RMB1 trillion, with a gradually concentrated market. Since this year, RMB300 billion funds have been raised from IPO, reaching an all-time high. With the RMB120 billion refunding, the SSE has raised RMB420 billion funds in the first three quarters of 2007. So far, the floating capitalization on the SSE held by institutional investors accounts for 37.8? of the total.
