Stocks News
- Time ripe to launch growth board
Date: 5-Dec-2007 Sources: (Shenzhen Daily)
THE time is ripe for the government to set up a long-delayed NASDAQ-style growth-enterprise stock board to fund the growth of the country's large pool of start-ups, said a senior lawmaker and the country's top securities regulator at a financial forum in Shenzhen on Saturday.
Cheng Siwei, vice chairman of the Standing Committee of the National People's Congress, said that demand for capital from the country's fast-growing small and medium-sized enterprises, government efforts to develop a multi-level capital market and the need to solve the problem of excess liquidity flooding the country, made it necessary for the government to launch the growth board as quickly as possible.
'We have all the conditions to launch the second board,'said Cheng. 'We should take the opportunity and actively prepare for the launch.'
He said that listing requirements should be lowered so that more 'innovation-oriented?companies could list shares to feed their hunger for capital.
Shang Fulin, chairman of the China Securities Regulatory Commission, said the launch of a growth board could greatly support the growth of the country's small and medium-sized enterprises in terms of technical innovation and fundraising from the capital market and venture capital.
He said the growth board should play an important role in helping raise funds for high-tech companies involved in the fields of energy efficiency and environmental protection.
He said regulators had gained valuable experience over the past three years from overseeing the small and medium-sized enterprise board, which was launched in 2004 and was a special section of the Shenzhen Stock Exchange. The experience would be very useful in launching the growth board, he said.
Shang didn't give a timetable for the launch of the board but said conditions were basically right.
China has long been considering launching a growth board in Shenzhen. It would be similar to the NASDAQ Stock Market or Hong Kong's Growth Enterprise Board to allow a platform for the listing of the large number of start-up companies that focus on technological innovation.
The growth board would provide an exit route for foreign private equity investors who have poured billions of dollars into the world's fastest-growing major economy. Many said that the thresholds for listing on the growth board should be much lower than the two main boards on the Shanghai and Shenzhen stock exchanges.
The plan was delayed partly because of the burst of the Internet bubble in 2000 in the United States.
But calls from domestic finance industry officials to set up such an exchange have been growing over the past year as foreign bourses step up their efforts to woo Chinese listings.
Wang Shouren, vice chairman of the Shenzhen-based Venture Capital Association, was quoted by domestic media as saying July 30 this year that the State Council, or Cabinet, had processed an application to set up the board and it was expected to officially open in 2008.
Domestic media also reported that more than 1,000 domestic enterprises were hoping to list on the proposed board.
China now has two main stock exchanges in Shanghai and Shenzhen, which were launched in the 1990s. The country also opened a board in Shenzhen dedicated to small and medium-sized firms in 2004.
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