stock issue

Shenzhen Stock Exchange

Shenzhen Stock Exchange is one of the People's Republic of China's three stock exchanges, alongside the Shanghai Stock Exchange and the Hong Kong Stock Exchange. It is the 9th largest stock exchange in Asia by market capitalisation (2008), and is based in Shenzhen, China.

Exchanges

The Shanghai and Shenzhen stock exchanges list more than 1,500 companies with a combined market capitalization of US$2,658.2 billion (2008), rivaling the Hong Kong Stock Exchange (US$2,121.8bn) as Asia's second-largest stock market behind the Tokyo Stock Exchange (US$3,925.6bn).

Listed companies

Most of the companies within this market belong to listed company in which the Chinese government maintains controlling interest. With regards to the listed companies, the government has viewed the stock markets has means of raising capital, but there is no current interest to privatization or selling off the state controlling interest in the SOEs (State Owned Enterprises). Until 2005, two-thirds of the shares in listed companies were non-tradable on the exchange, creating a problem in which the tradable shares were valued higher than their proportion in the company. In 2005, as part of the Chinese stock issue reform, the non-tradable shares were made tradable and the holders of tradable shares were compensated by having extra equity in the company.

Hours

The exchange has pre-market sessions from 09:15am to 09:25am and normal trading sessions from 09:30am to 03:00pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance.

Indices

The Shenzhen Exchange launched the blue-chip composite index in January 1995. It also directed a subsidiary, the Shenzhen Securities Information Co., to launch the Shenzhen Stock Exchange 100 Index on the first trading session of 2003, using 2002's final day of business as a benchmark.

The new index is composed of major firms such as Shenzhen Development Bank, property developer China Vanke Co Ltd and Guangdong Electric Power Co. Index components account for about 40 percent of the Shenzhen bourse's capitalization, 61 percent of the combined after-tax profits of Shenzhen-listed companies, and 43 percent of turnover.

The Shenzhen exchange will adjust the index's components every six months.

History and Events

The initial public offering (IPO) activity in Shenzhen stock exchange was suspended from September 2000 as the Chinese government pondered merging its bourses into a single exchange in Shanghai and launch a Nasdaq-style second board in Shenzhen aimed at private and technology companies.

The central government shut down trade on the Shenzhen and Shanghai Stock Exchanges for over a week from May 1, 2003 to fight against Severe Acute Respiratory Syndrome (SARS).

Future

On November 22, 2007 the Shenzhen Stock Exchange broke ground for the new premises in down town Shenzhen. The expressive new building will be designed by Dutch Office for Metropolitan Architecture, the project is headed by architects Rem Koolhaas and Kunle Adeyemi and managing partner Victor van der Chijs. The new Shenzhen Stock Exchange is planned as a financial center with civic meaning. The external area is designed as a public space for festivals and gathering whilst the 250m tall tower will host the trading floor of high-tech and many new, high growth stocks as well as the Shenzhen Stock Exchange offices, registration and clearing house, the Securities Information Company and ancillary services in a gross floor area of 200,000m2.