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SHSE-SZSE300 ETF is ready for launch, with one-on-one bond spot trading and repo under research
"The cross-market SHSE-SZSE300 ETF will be launched soon as the SSE is making efforts to introduce cross-border ETF this year," said the National Committee Member of the Chinese People's Political Consultative Conference and also Governor of the Shanghai Stock Exchange (SSE) Geng Liang in Beijing yesterday, "The Shanghai market saw a total net profit of RMB2.2 trillion among investors last year."
"The overall structure of the SHSE-SZSE300 ETF tracking 93 stocks on the Shenzhen Stock Exchange (SZSE) and 207 stocks on the SSE has so far been rounded off, with details for business rules, technology, settlement and registration finalizing," said Geng. Overseas exchanges have showed their great interest in cross-border ETF. So far, 12 foreign exchanges and index companies have authorized the SSE with use of their indices to formulate and list ETF products on the SSE. Besides, a few fund companies are also active in this innovative business. "We expect the cross-border ETF, though still under study, to be introduced in this year by overcoming the difficulties mainly in technology and operation," added Geng.
Researches have been conducted for one-on-one bond spot trading and repo
"We have asked for coordination of China Securities Depository and Clearing Corp. Ltd. to carry out unsecured settlement in full amount while studying on the one-on-one bond spot trading and repo mainly targeting at institutional investors, which as a result will open a risk-controllable mode of trading and settlement for some bonds at a relatively lower grade," said Geng when taking about the development of bond market.
Moreover, the SSE is also considering the following aspects in developing the bond market in this year. First, efforts should be made to cultivate more institutional investors on the bond market by taking opportunity of the return of listed banks on the exchange for bond business. Second, active endeavors should be made to promote the development of corporate bonds of listed companies. By February 2010, 11 SSE-listed companies had issued corporate bonds, with a total of 20 companies so far approved by the China Securities Regulatory Commission for issuing the bonds. It is predicted that dozens of companies will have the intention to follow suit. Third, researches should be made to coordinate with China Government Securities Depository Trust & Clearing Co., Ltd. (CDC) for better communication between CDC and the SSE, the two backstage supporters for the bond market, with an aim to form a united and joint bond market. At present, among the 14 listed commercial banks, 10 have chosen the SSE for their bond business.
Net profit of investors on the SSE totals RMB2.2 trillion last year
According to Geng, the Shanghai market ran in a much more stable condition in 2009. The number of days seeing a 2% rise or drop of the SSE Composite Index is 118 in 2008, accounting for 44% of all the trading days, but the figure of lat year is only 62, or 25% of the total.
Besides, the investors on the Shanghai market, benefited from a higher profitability, realized a total net profit of RMB2.2 trillion in 2009 after putting altogether the gains and losses on the whole market. Among them, small-and-medium-sized investors and institutional investors grabbed RMB1.25 trillion and RMB1 trillion, respectively.
Geng said that the SSE achieved a fast growth in market capitalization from RMB9.47 trillion in 2008 to RMB18.74 trillion at the end of 2009, or up 90%, trading volume from RMB73.3 billion on a daily basis in 2008 to RMB142 billion last year, or up 94%, financing amount from RMB223.8 billion in 2008 to RMB334.3 billion in 2009, or up 49%, and other major indicators. Since the equity division reform, the SSE has attracted RMB1.4 trillion through financing, or 2.8 times of the total in the previous 15 years. Last year, the SSE ranked No. 5 among the major exchanges in the world in terms of financing amount.
Last but not least, the new generation trading system of the SSE, with a smooth run last year, has provided the market with more security and stability. What's more, the SSE's levels of regulation, services and investor education have also been elevated to a great extent.
