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BOURSE BRAVADO
Does China need another stock exchange or better regulation of existing bourses?
The newly established Beijing Stock Exchange is positioned as an exit channel for small companies. It appears to be a replacement for the National Equities Exchange and Quotations (NEEQ), which rose to prominence around 2015 but soon saw its progress curtailed – first by a nationwide IPO suspension, then by a lack of liquidity.
Guidelines and a launch date will follow a public consultation period, but NEEQ has indicated that the Beijing bourse will adopt a registration-based listing system like that used on Shanghai’s Star Market and on Shenzhen’s Chinext. The emphasis is on offering candidates lighter-touch regulation and a smoother path to the bourse.
However, regulators have contradicted the philosophy of the Star Market, calling for heightened scrutiny of listing candidates. This has caused a string of high-profile, relatively large-cap companies to pull the plug on IPOs this year.
The Beijing Stock Exchange is well-intended. It remains to be seen whether it lives up the hype that will surround the eventual launch.
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