The Shanghai Stock Exchange (SSE) yesterday released its 2007
development plan, which highlights nine points for building a
world-class stock market with an efficient trading system and
product diversity.
According to the plan, the SSE will step up efforts to attract
more mainland companies that have already listed on the Hong Kong
bourse to seek a dual listing in Shanghai. In addition, it will try
to attract more initial public offerings by leading state-owned
companies to boost market size.
The SSE said it would create a favorable market environment to
speed up the listing process and to encourage mergers and
acquisitions among listed companies.
With the Shanghai Composite Index the leading market indicator
rising more than 130 percent in 2006, the SSE is one of the world's
fastest growing stock markets. Most of the mainland's larger
enterprises, such as the Industrial and Commercial Bank of China,
Bank of China, Baosteel and China Unicom, are already listed in
Shanghai.
The combined market value of the 10 largest Shanghai listed
companies account for more than 50 percent of the total market
value.
"The SSE has substantially increased its investment value and
market status in the world, as it strives for world-class stock
market status," said SSE Chairman Geng Liang.
The SSE's goal for 2007 is to structure a more diversified
market with the balanced development of stocks, bonds and a number
of financial derivatives. Covered warrants and other structural
products derived from blue-chips stocks are expected to be launched
in 2007 to increase market liquidity.
"We have made full preparation for the launch of covered
warrants, but are still waiting for approval from the regulatory
authorities," said the SSE's manager of financial derivatives Chen
Hao.
The bond market will be an important area for the SSE to develop
in 2007, and particularly the trade in state bonds, corporate bonds
and asset securitization products. The SSE will develop an
electronic system for bond trading this year.
The stock trading system will also be updated early this year to
include more functions. The new system is expected to be put on
trial during the non-trading period in April.
This is a very important year for the SSE, which is faced with
unprecedented opportunities and challenges, a spokesman from the
SSE said.
The share reform was almost completed in 2006, resulting in a
more rational market. By the end of 2006, there were a total of
1,269 companies that underwent the share reform, accounting for 94
percent of the total. This year, the SSE will help the remaining
companies undergo the reform process.
Market sources agree that there is a lot of work left. Despite
the tremendous progress made in recent years, the SSE is still
behind other mature stock markets in the world in terms of
efficiency and product diversity. So, the SSE is trying to
significantly narrow the gap in 2007.
(China Daily March 6, 2007)