On December 5, 2021, At the 17th China (Shenzhen) International Futures conference, Shenzhen Stock Exchange (hereinafter referred to as “SZSE”) introduced the situation and main data of the reform pilot for more than a year. Among them, the gem was launched on August 24, 2020, which is an important arrangement for China to deepen the reform of the capital market and improve the basic system of the capital market, introducing “living water” into the capital market , expand the number of financing enterprises. The pilot registration system can promote the improvement of the information disclosure and delisting system of the gem, and form a market-oriented screening mechanism for the “survival of the fittest” of start-ups. In April 2021, the Shenzhen Stock Exchange completed the merger of the main board and the small and medium-sized board. The main board of Shenzhen Stock Exchange resumed the function of issuance and listing, interconnected and echoed with the Hong Kong stock exchange, and formed a diversified capital market service system of “domestic + overseas” and “main board + gem” with clear levels and characteristics. As of November 26, there were 238 newly listed companies under the pilot registration system, and the financing amount of IPO exceeded 180 billion yuan. The main concerns are as follows:
First, the reform of Shenzhen Stock Exchange helps the development of bay area science and innovation entity enterprises. First, support the successful listing of high-quality science and technology enterprises in the region. According to the data of Shenzhen Stock Exchange, among the newly registered companies on the gem, high-end manufacturing and service industries such as computer, communication and other electronic equipment manufacturing are the main ones, and high-tech enterprises account for 86%. Among the newly registered listed companies, Dawan District companies accounted for 24.2%. As an important financial infrastructure in Guangdong, Hong Kong and Macao Dawan district and the socialist leading demonstration zone, the Shenzhen Stock Exchange gem has highlighted its function of serving the construction of “double zones”. Second, with the advantages of the listing platform of Shenzhen Stock Exchange, Dawan GEM companies focus more on industrial integration, based on the high-quality development of the main business, and promote the transformation and upgrading of traditional industries. As of July 31, 2021, Dawan gem has implemented and completed 76 restructuring, with a total transaction amount of RMB 61.051 billion and supporting financing of RMB 19.767 billion. On the other hand, a large number of enterprises landed in the capital market through mergers and acquisitions, and 70 Guangdong enterprises were acquired by GEM listed companies through major asset restructuring, with a transaction amount of 67.709 billion yuan. Third, the development of Shenzhen Stock Exchange gem has driven the innovation capital ecosystem in Dawan district to be more dynamic. As of July 31, 112 Dawan GEM companies had raised 93.404 billion yuan through non-public offering of shares, issuance of convertible bonds and allotment of shares. A total of 129 Dawan GEM companies obtained 18.631 billion yuan of venture capital investment before listing. According to the data of Guangdong securities regulatory bureau, as of August 20, there were 271 companies to be listed on the gem in Guangdong Province alone, of which 78 had applied to the CSRC for listing. Taking the fast train of gem reform and development and realizing quality and efficiency improvement with the help of the capital market, these “reserve forces” of Guangdong gem will also help Dawan District build a high-quality development highland in the future.
Second, the reform of Shenzhen Stock Exchange has further improved the level of financial services in the bay area. Through the reform, the market service function of Shenzhen Stock Exchange has been effectively improved, and the market inclusiveness and coverage have also been improved. First, we promoted the smooth implementation of the pilot of infrastructure public offering REITs, launched innovative products such as scientific and technological innovation bonds and carbon neutralization special bonds, realized the interworking of Shenzhen and Japan ETFs, and listed characteristic varieties such as science and innovation and entrepreneurship 50ETF, MSCI China A50 interworking ETF and carbon neutralization ETF. The second is to promote the construction of derivatives market. Since the listing of CSI 300etf options, the market has operated smoothly and gradually played its functions, which has played a positive role in enhancing market vitality and toughness. Since this year, the average daily turnover of 320000 and the average daily insured market value of more than 3 billion yuan have become an important insurance tool for spot investors. After two years of market operation test, Shenzhen Stock Exchange has accumulated valuable experience and laid a solid foundation for enriching ETF options in the next step. Third, give play to the function of capital market hub, layout product lines around industrial chain, supply chain and innovation chain, and accelerate the creation of a global asset allocation platform with innovative market characteristics. In the future, Shenzhen Stock Exchange will focus on building an innovative capital formation system suitable for the “double carbon” goal, increase financing support for high-quality subjects in new energy and other fields, promote the research and development of the “double carbon” theme index, improve the quality of environmental information disclosure, and enhance the awareness of green sustainable development of listed companies. Fourth, strengthen the linkage with commercial banks, meet the wealth management and risk management needs of the people in Dawan District, jointly deepen cooperation in many fields such as enterprise listing cultivation, fixed income, product innovation, science and technology finance, cross-border services and information sharing, give full play to their respective advantages, and actively develop innovative ABS varieties of intellectual property pledge, Better serve the development of a wider range of scientific and technological innovation enterprises, private enterprises and small, medium and micro enterprises, and provide higher quality and more efficient financial services for the development of the real economy.
Third, the reform of Shenzhen Stock Exchange has promoted the interconnection between the bay area and overseas capital markets. Guangdong, Hong Kong and Macao Dawan District, which has two major exchanges, has gathered a large number of technology companies and innovative enterprises to strengthen Shenzhen Hong Kong linkage and further leverage the capital market, which can not only give full play to the functional role of the important financial center of the Bay District, but also attract more venture capital funds, intermediary institutions and start-up enterprises from all over the world to settle in Guangdong, Hong Kong and Macao Dawan district and build a competitive industrial chain, Enhance the global attraction of advanced manufacturing and strategic emerging industries, so as to accelerate the formation of high-end, open and innovative ecological Bay area. As an important product of China’s reform and opening up in the financial sector, the Shenzhen Stock Exchange has signed memorandums of understanding with 52 exchanges and market institutions around the world, continued to strengthen cross-border cooperation, successively implemented the exchange of Shenzhen Hong Kong stock connect, Shenzhen Hong Kong and Shenzhen Japan ETFs, and actively attracted more international institutional investors to participate in the Shenzhen stock exchange market. By the end of October 2021, the shares held by foreign investors have accounted for 5% of the circulation market value of Shenzhen market, and the turnover has accounted for 8% since this year. Shenzhen Stock Exchange gave play to its advantages of “connecting Hong Kong and facing the world”, provided cross-border information display services for the first batch of offshore RMB local government bonds of Shenzhen municipal government, and helped the integration of financial services in Guangdong, Hong Kong, Macao and Dawan district. After the launch of Hang Seng technology index futures and MSCI China A50 interconnection index futures in Hong Kong, Shenzhen Stock Exchange launched five ETF products linked to corresponding indexes, further enriched the Shenzhen cross-border ETF product system, and formed a pattern of mutual matching and two wheel drive between futures and spot. China’s sustained economic growth and the huge development potential of the capital market provide rare opportunities for global investors. Based on the bay area and facing the world, the Shenzhen Stock Exchange continues to promote the institutional two-way opening of the capital market, improve the institutional arrangements for cross-border investment and financing, improve the connection of domestic and foreign rules and the level of infrastructure interconnection, improve and expand the Shenzhen Hong Kong stock connect mechanism, optimize the way for overseas institutional investors to participate in the bond market of the stock exchange, and expand the interconnection channels of ETFs, Provide international investors with more diversified investment choices and risk management tools, promote the construction of a wider range, wider fields and deeper opening-up pattern, and continuously improve the influence of China’s capital factor pricing.
