Shenzhen Stock Exchange is one of China's three stock exchanges. It is based
in Shenzhen, China.
Exchanges
The Shanghai and Shenzhen stock exchanges list
more than 1,200 companies with a combined market capitalization of US$500
billion (2005) (30% of GDP), rivalling the Hong Kong Stock Exchange as Asia's
second-largest stock market behind the Tokyo Stock Exchange.
Privatization
Market capitalization is a problematic
concept in the market. Most of the companies within this market belong to state
owned enterprises (SOEs) in which the Chinese government maintains controlling
interest. With regards to the SOE's, the government has viewed the stock markets
has means of raising capital, but there is no current interest to privatization
or selling off the state controlling interest in the SOE's. One difficulty is
that were the Chinese government willing to privatize the SOE's, the flood of
shares on the markets would likely lead to a sharp drop in prices.
Indices
The Shenzhen Exchange launched the blue-chip
composite index in January 1995. It also directed a subsidiary, the Shenzhen
Securities Information Co., to launch the Shenzhen Stock Exchange 100 Index on
the first trading session of 2003, using 2002's final day of business as a
benchmark.
The new index is composed of major firms such as Shenzhen Development Bank,
property developer China Vanke Co Ltd and Guangdong Electric Power Co. Index
components account for about 40 percent of the Shenzhen bourse's capitalization,
61 percent of the combined after-tax profits of Shenzhen-listed companies, and
43 percent of turnover.
The Shenzhen exchange will adjust the index's components every six
months.
IPO
The initial public offering (IPO) activity in
Shenzhen stock exchange was suspended from September 2000 as the Chinese
government pondered merging its bourses into a single exchange in Shanghai and
launch a Nasdaq-style second board in Shenzhen aimed at private and technology
companies.
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