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The Shanghai Stock Exchange (SSE) will mark its 16th birthday in a few days. In the development of the Shanghai securities market this year, the shining point, undoubtedly, is the dramatic expansion of the market size due to the steadily improving market. On the one hand, the total market capitalization achieves double growth. On the other hand, the market attracts more and more listed companies, especially those super large-scale state-owned blue-chip companies on the SSE, such as Industrial and Commercial Bank of China Co. Ltd. (ICBC) and Bank of China Limited(BOC). Statistics of the World Federation of Exchange (WFE) show that the SSE's total market capitalization, overrunning those in Taiwan and Singapore, has ranked No.19 and for the first time among the top 20. Thus, SSE has reached its preliminary goal in building the main board blue chip market.
This year, with the continuous bull market catalyzed by the equity division reform, the total market capitalization of the listed companies on the SSE has broken a succession of records. By December 11, it had reached RMB5,862.929 billion, doubling the amount at the end of last year. Plus the RMB1,600 billion on the Shenzhen Stock Exchange, the total market capitalization on the domestic securities markets is close to RMB7,500 billion, accounting for 35% of the GDP. Previously, the domestic securities markets had always been criticized for its drift from the national economy. But now, the securities markets, especially the SSE, with an improved close relation with the national economy, have functioned as the "weatherglass" for China's economy.
Since the reintroduction of new shares issuance, a large number of high-quality large-scale blue-chip state-owned enterprises, represented by ICBC, BOC and Air China Limited, have been successfully launched on the SSE. This has directly expanded the SSE's market size and activated the investors. With the largely increased market investment value, the SSE has attracted more and more investors, especially the investment funds and QFIIs. The new issued funds, popular with the public, have led the savings to investment. With the recent market investment focus of the large-cap stocks, especially the state-owned blue chips, the SSE Composite Index has soared to 2,000 points, approaching the all-time high. Meanwhile, with the market expansion and the market development in depth after listing of the blue chips, the trading volume on the SSE has repeatedly set new records. By December 11, its trading volume of the stocks and warrants, breaking through RMB6,000 billion, had reached RMB6,073.7 billion. Judging from the accumulated data, its stock trading volume of this year is 2.6 times of that of last year, or over 60% more than the previous all-time high of RMB3,137.386 billion in 2000.
The most impressive listing this year, with a lot of new records, is the ICBC's synchronized listing of both A and H shares on the SSE and the Hong Kong Stock Exchange, respectively. With more than RMB40 billion raised from A shares and an overall size of more than 250 billion shares, the listing of the "super carrier" ICBC, instead of causing a market panic, has led to an overall market rise. This has typically demonstrated that the domestic securities markets, especially the Shanghai market, with the substantial change after the equity division reform, have much more tolerance for volume and depth than what was in the past. So far, ICBC's total market capitalization has exceeded RMB1,000 billion, accounting for more than 18% of the total on the SSE. ICBC's successful synchronized listing of A+H shares, the first of its kind, has set a good example for the future listings of other large-scale state-owned enterprises and the return of H shares on the SSE. All this will solidify the SSE's footing on the blue chip market.
The WFE statistics by this October show that among all the international exchanges, the SSE had ranked No.19 in terms of total market capitalization and No.2, next only to the American Stock Exchange, in terms of growth rate of market capitalization. Its trading volume, exceeding those on the National Stock Exchange of India, the Oslo Stock Exchange and the Osaka Securities Exchange, had ranked No.17. In terms of listed companies' number, the SSE had ranked No.13. As for the fund raised, it had ranked No.12, ahead of the emerging markets in India, Korean, South Africa and Singapore as well as the NASDAQ Stock Market and the Deutsche Börse. What's more, the warrant market on the SSE, with its rapid development, had surpassed the formers and ranked No.3 in terms of its trading volume of this year.
Viewed from the warrant market's accomplishment, the Shanghai securities market in 2006, with its overall size rising to a new level, has also made great improvement on the categories and depth of its products. Furthermore, the innovation of the products and exchange mechanism, helpful to further improvement of the depth, function, capacity and liquidity of the SSE, will accelerate the construction of the SSE's blue chip market.
