Shanghai OTC market faces huge tests
By Feng Jianmin |
June 29, 2012, Friday
|
Print Edition
Print Edition
Shanghai has seen the over-the-counter equity market grow robustly since it was set up in February, but the city's equity exchange sees huge challenges due to low transaction volume and construction of similar exchanges across China.
The Shanghai Equity Exchange now has 21 companies listed, two more since its formation, General Manager Zhang Yunfeng said during the Night Chat by the Huangpu River, part of this year's Lujiazui Forum which opened yesterday.
Of the listed companies, 11 are tradable, five more than February. The remaining firms haven't passed the lock-up period required by the exchange.
The exchange was set up to allow companies, mainly high-technology startups, to get bank loans and raise funds through private placement.
The total transaction volume has topped 70 million yuan (US$11.1 million), Zhang said.
"The current transaction is robust, but our future development is really worrisome," Zhang stressed.
Zhang outlined three challenges ? building of similar of equity exchanges across the country, possibilities of regional monopoly and the limits of these exchanges to serve small businesses because of regional barriers.
Zhang said that over the five years of operation of the OTC market in Beijing, only one of the 62 securities firms has made a profit.
Xie Geng, director-general of the market supervision department of the China Securities Regulatory Commission, said China should develop OTC markets with different sizes and conditions to serve small firms in their different life cycles.
The Shanghai Equity Exchange now has 21 companies listed, two more since its formation, General Manager Zhang Yunfeng said during the Night Chat by the Huangpu River, part of this year's Lujiazui Forum which opened yesterday.
Of the listed companies, 11 are tradable, five more than February. The remaining firms haven't passed the lock-up period required by the exchange.
The exchange was set up to allow companies, mainly high-technology startups, to get bank loans and raise funds through private placement.
The total transaction volume has topped 70 million yuan (US$11.1 million), Zhang said.
"The current transaction is robust, but our future development is really worrisome," Zhang stressed.
Zhang outlined three challenges ? building of similar of equity exchanges across the country, possibilities of regional monopoly and the limits of these exchanges to serve small businesses because of regional barriers.
Zhang said that over the five years of operation of the OTC market in Beijing, only one of the 62 securities firms has made a profit.
Xie Geng, director-general of the market supervision department of the China Securities Regulatory Commission, said China should develop OTC markets with different sizes and conditions to serve small firms in their different life cycles.
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