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The Financial Innovation Lab under the Shenzhen Stock Exchange released today the 2007 Stock Market Performance Report, the second of its kind since a year ago. The report gave a detailed and full coverage of the operating efficiency and quality of the Shenzhen stock market in terms of liquidity, fluctuation, effectiveness and order execution quality, and thus served as essential evidence and reference for boosting market operation efficiency and promoting healthy market development.
The performance of the Shenzhen stock market in 2007, on the whole, had further improved, as evidenced in the constantly rising market liquidity, greater but still rational market fluctuations compared with 2006, good order execution quality, higher execution speed, and better system efficiency.
Through analysis of various sectors, the Shenzhen Component Index constituents and the heavily-held institutional picks turned out to outperform other types of stocks. As stock liquidity is in positive proportion to the size of listed companies, the liquidity of SME stocks was higher than a year ago, with order execution speed further enhanced. The average execution time for fixed-price orders, non-market-based fixed-price orders, and market-based fixed-price orders was reduced by 27%, 38.5%, and 13.9% respectively. While market price orders were widely adopted, accounting for 48% of the total.
China’s securities market is undergoing fundamental transformations incurred by the split share structure reform, and facing rapid market scale expansion and investor structure changes. Under such a background, releasing regular market performance reports can not only provides decision-making reference for improvement of liquidity and market efficiency but also offer evidence on optimizing the trading and information disclosure systems, enhancing market transparency and investor structure.
Following the general trend of international stock exchanges to provide low-cost and globalized trade services, the SZSE offers important market construction reference in regularly issuing market performance reports, which also signals that the local stock market is growing into a market with higher liquidity, quicker execution speed and lower trading cost. The gradually improving market indexes reflect the results of reform and innovation in the country’s securities market, as well as the achievements in market system construction, trade mechanism reform, and trading system upgrade made by the SZSE.
A SZSE official expressed that their Financial Innovation Lab would release such market performance reports on a regular basis, and continuous efforts be taken to improve market performance in terms of liquidity, trading system, and information disclosure quality, so as to provide investors a trading market with higher efficiency and lower costs.
