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No less than 8 companies will be listed at the Growth Enterprises Board at the beginning, Chen Dongzheng, director of the Shenzhen Stock Exchange (SZSE) said yesterday.
He noted the SZSE will try its utmost to shore up the development of small and medium-sized enterprises (SMEs) in the following years, forging a fair and efficient capital market catering for the growth and advancement of SMEs.
No less than 8 companies to list at Growth Enterprises Board
Though some small and medium-sized enterprises (SMEs) have been felt the impact of the global financial meltdown, the backup resources of the start-up board are still very rich, Chen said.
“China does not lack enterprises, and the problem is that the market cannot cater for the needs of enterprises.” Chen said.
He noted no less than 8 companies will be listed at the Growth Enterprises Board at the beginning, without specifying the exact number.
“Due to some reasons, the Growth Enterprises Board did not launch last year. Now the SZSE is trying its utmost to prepare for the board. In the long run, it is a historical trend to provide a platform supported by capital market for SMEs.” Chen said. “The launch of a start-up board is without a doubt.”
Chen also reminded investors of investment risks because companies listed at the start-up board will pay more attention to standardized operation.
He revealed that the Growth Enterprises Board will adopt the system of qualified investors, which will be amended and improved in accordance with market situation in a bid to protect investors’ rights.
Gear up to support SMEs
Chen noted the SZSE will gear up to shore up the development of small and medium-sized enterprises (SMEs) in the following years, forging a fair and efficient capital market catering for the growth and advancement of SMEs.
“SMEs represent the future of Chinese economy.” Chen said. “While large state-owned enterprises symbolize the power of Chinese economy, SMEs symbolize the dynamics of Chinese economy. Currently SMEs are the leading power of the sustainable development of national economy.”
When talking about the role of capital market played in SMEs, Chen said capital market plays more roles in guidance and demonstration except for financing support.
SMEs, especially technology-oriented enterprises and enterprises with high growth must resort to capital market in order to grasp market share in the global market, which means a great number of enterprises need to be transformed into holding companies, Chen said.
Up to date, more than 300 companies in Zhongguanxun Science Park have been transformed, while 200-plus companies are transforming. Though IPO is still unavailable for those 500-plus companies who are under shareholding system transformation, they are allowed to raise funds from targeted sources, transfer and float shares when the share standardization is completed.
Chen said the support of SMEs through capital market can also initiate private investment. If the Growth Enterprises Board provides a financing channel for SMEs, those who getting rich first and overseas funds will be enticed to invest in start-up enterprises.
Biggest innovation: Construction of multi-layered market
For the SZSE, the construction of multi-layered market is the biggest innovation, Chen said.
Besides the Growth Enterprises Board, it is high time to expand the trial program of the quotation and transfer system, he said.
“The three-year trial revealed that the benefits of the Zhongguancun Agent Transfer System outweighed the drawbacks.” Chen said. “The system is beneficial to the support of enterprises in the high-tech park, especially those with high technology and high growth.”
The biggest difficulty of advancing the system is how to activate the attraction power of the agent system and quotation system in an effort to promote securities firms’ initiative, he added.
“In the future, we will explore the possibility of becoming a market maker through the quotation and transfer system.” Chen said. “Currently, holding shares by securities firms is not permitted by law, thus the business of market making is not available. But it may be launched in the future.”
