The Beijing Stock Exchange Company welcomes a new round of reassessment opportunities, with policies exceeding expectations
"The current round of reform on the Beijing Stock Exchange has exceeded our expectations." When discussing the intensity of the reform, Zhu Weiyi, the general manager of Guangdong Power Private Equity Fund Management Co., Ltd., couldn't conceal his excitement. He said, "The Opinions on the High Quality Construction of the Beijing Stock Exchange issued by the China Securities Regulatory Commission provide a clear framework for the construction and development of the Beijing Stock Exchange, and investors have confidence in making long-term investments. We believe that the Beijing Stock Exchange will definitely be built into a securities exchange with significant influence, truly becoming the 'main battlefield' for serving innovative small and medium-sized enterprises."
The combination of efforts to promote high-quality development and reform of the Beijing Stock Exchange has taken shape. On September 1st, the China Securities Regulatory Commission issued the Opinions on the High Quality Construction of the Beijing Stock Exchange. On that day, the Beijing Stock Exchange and the National Equities Exchange Corporation issued the first eight reform and innovation measures. Among them, the Beijing Stock Exchange has released seven measures, including investor suitability, execution standards for listing conditions, conversion to the New Third Board, issuance floor price, market making trading, and margin trading and short selling. National stock conversion companies have further optimized the stratification standards for the New Third Board.
Zhu Haibin, General Manager of the Research Center of the North Exchange of Kaiyuan Securities, stated that the current round of reform of the North Exchange focuses on improving the supply of high-quality listed companies, optimizing the market ecology, increasing the number of various types of investors, and optimizing trading systems. Through this round of reform, it is expected that the scale of individual investors on the Beijing Stock Exchange will significantly increase, and the overall market liquidity will be greatly improved; At the same time, undervalued companies, high growth, specialized, and innovative "little giants" in the Beijing Stock Exchange 50 Index, as well as companies on the Beijing Stock Exchange with expectations of a turnaround, may contain a new round of reassessment opportunities.
Simplify the account opening process for investors on the Science and Technology Innovation Board
This reform of the Beijing Stock Exchange aims to expand the investor team, increase investor participation rate, and enhance buyer power. On September 1st, the Beijing Stock Exchange released the revised "Management Measures for Investor Appropriateness of the Beijing Stock Exchange" and its supporting business guidelines, which clarify that when investors who have opened trading permissions on the Science and Technology Innovation Board apply to open trading permissions on the Beijing Stock Exchange, securities companies will no longer verify the investor's securities assets and trading years, nor conduct knowledge assessments. Investors can open trading permissions on the Beijing Stock Exchange after signing a risk disclosure letter.
"Although this round of reform did not directly lower the threshold for individual investors, but simplified the approval procedures for investors opening accounts on the Science and Technology Innovation Board and directly opened accounts on the Beijing Stock Exchange, it is equally significant. On the one hand, it has expanded the investor team of the Beijing Stock Exchange, achieving the goal of introducing incremental funds into the market. On the other hand, it has also allowed investors with higher risk tolerance to enter the Beijing Stock Exchange market, playing a role in optimizing the investor structure of the Beijing Stock Exchange." Liu Ping An, Chairman of Jin Changchuan Capital, told China Securities News.
Zhou Yunnan, founder of Beijing Nanshan Investment, said, "Investors on the Science and Technology Innovation Board are relatively active traders who can bring broader attention and higher attractiveness to stocks on the Beijing Stock Exchange. At the same time, the increase in investors will attract more incremental funds to enter the Beijing Stock Exchange."
The reporter learned that the revision of the investor suitability rules of the Beijing Stock Exchange fully utilizes the effectiveness of multi-level capital market reforms and explores new dimensions of investor suitability evaluation, that is, shifting from a traditional focus on asset size to a greater emphasis on the suitability of investors in terms of investment experience, investment preferences, and products. Companies listed on the Beijing Stock Exchange and those listed on the Science and Technology Innovation Board have a high degree of similarity in their science and technology innovation attributes, making it feasible to connect investors on the Science and Technology Innovation Board with the Beijing Stock Exchange.
According to relevant sources close to the Beijing Stock Exchange, the exchange will fully mobilize the enthusiasm of securities brokerage lines, and improve the account opening rate of potential investors and the participation of existing investors by strengthening precise services and simplifying permission opening procedures.
The person in charge of Galaxy Securities told reporters that recently, the favorable policies of the Beijing Stock Exchange have been implemented one after another. The optimization of investor suitability management requirements by the Beijing Stock Exchange is of great significance for promoting high-quality development of the exchange. It is expected to introduce more active water to the market and stimulate market vitality. As a pioneer of the registration system, the Science and Technology Innovation Board has about twice the number of customers on Galaxy Securities as on the Beijing Stock Exchange. Exempting investors who already have the authority on the Science and Technology Innovation Board from asset and trading experience recognition will be beneficial for strengthening the investor team of the Beijing Stock Exchange and providing more investors with opportunities to allocate high-quality innovative small and medium-sized enterprises. The optimization measures for investor suitability have undergone minimal changes at the technical and business levels, and Galaxy Securities is ready to go online at any time for support.
Overall, this investor suitability reform is conducive to improving the liquidity of the Beijing Stock Exchange market and improving the market valuation and pricing system; At the same time, it further facilitates various investors to actively enter the market, laying a solid foundation for achieving a balance between investment and financing, promoting sustained and healthy market development.
No longer determine the minimum issuance price in advance
According to current regulations, companies that publicly issue and list on the Beijing Stock Exchange must clearly specify the issuance price during the deliberation of relevant matters at the shareholders' meeting. But in practice, there is a certain time interval, usually one year, from holding a shareholder meeting to issuing stocks. During this period, there may be changes in the company's operating conditions, market environment, and other aspects, often requiring adjustments to the issuance floor price.
In this reform, the Beijing Stock Exchange has adjusted the method of determining the issuance floor price and the disclosure requirements of relevant information. It no longer requires issuers to determine the specific issuance floor price in advance. Issuers can use the price formed by subsequent inquiries or pricing as the issuance floor price, further improving the marketization level of new stock issuance pricing and promoting the balanced development of the primary and secondary markets.
Zhu Haibin told reporters that the issuance floor price is a unique pricing mechanism of the Beijing Stock Exchange, and its original intention was to promote the success of the issuance and protect the interests of old shareholders. During the initial exploration period of the Beijing Stock Exchange, the issuance floor price mechanism played a certain positive role in the smooth issuance of new shares. However, as the market gradually matured, pricing reference standards and methods became more mature and market-oriented. On the one hand, the reference value of the issuance floor price is gradually decreasing; On the other hand, the issuance of a reserve price that causes investors to misread is not conducive to the formation of stable market expectations. With the reform and development of the Beijing Stock Exchange market, this system adjustment is more in line with the habits of A-share market investors and is also a trend towards marketization.
Liu Ping'an stated that adjusting the issuance floor price system has taken a substantial step towards market-oriented enterprise pricing, reducing the degree of confusion in the market's judgment of enterprise price signals. The Beijing Stock Exchange company comes from the New Third Board, but there is still a trading period before it announces its move to the Beijing Stock Exchange. During this period, many investors will use the issuance floor price as a criterion for evaluating the company's value. However, this may be a wrong price signal, as in practice, most New Third Board companies planning to list on the Beijing Stock Exchange will lower their issuance floor prices.
Another market insider stated that the Opinion proposes to "reform the issuance bottom price system and promote the improvement of marketization level", which means that the issuance bottom price system of the Beijing Stock Exchange may withdraw from the historical stage, help market parties fully play games in the issuance process, form reasonable prices, and improve the valuation and pricing function of the Beijing Stock Exchange. At the same time, the Opinion proposes to "optimize the strategic allocation arrangement for new stock issuance, relax the restrictions on the number of strategic investors and shareholding ratios", which fully considers the actual situation of the Beijing Stock Exchange market and helps better meet the participation willingness of strategic investors, driving more investors to participate in new stock public offerings and secondary market transactions.
Smooth transition mechanism to improve valuation level
Market entities have always had high expectations for the conversion mechanism of listed companies on the Beijing Stock Exchange. The Opinion states that it is necessary to steadily and orderly promote the conversion of listed companies on the Beijing Stock Exchange.
It is understood that in the early stage, the China Securities Regulatory Commission has issued the "Guiding Opinions on the Conversion of Listed Companies on the Beijing Stock Exchange", and the Shanghai and Shenzhen Stock Exchanges, Beijing Stock Exchanges, and China Securities Depository and Clearing Corporation have also formulated relevant business rules. In recent years, various reforms in the capital market have continued to deepen, especially with the establishment and rapid development of the Beijing Stock Exchange market, the number of listed companies has continued to increase, and expectations from all parties have become more diverse. Therefore, the Beijing Stock Exchange is soliciting opinions and suggestions from sponsoring institutions, listed companies and other operating entities on the revision and improvement of the "Guidelines for the Continuous Supervision of Listed Companies on the Beijing Stock Exchange No. 7- Transfer Board". In the future, efforts will be made to improve it as soon as possible and further smooth the transfer board mechanism.
"In the current market environment, opening up the linkage mechanism of the capital market system will have a positive promoting effect on improving market liquidity and activating market transactions on the Beijing Stock Exchange. This not only activates the existing market, but more importantly, promotes market growth and allows more high-quality innovative small and medium-sized enterprises to list on the Beijing Stock Exchange." Liu Ping'an said.
Zhou Yunnan said, "The transfer mechanism of the Beijing Stock Exchange has made the multi-level capital market an organic whole, providing a larger capital highland for the top enterprises of the exchange in serving the 'main battlefield' of innovative small and medium-sized enterprises, helping high-quality small and medium-sized enterprises to reach higher levels, enhancing the ability of the capital market to serve the real economy, and promoting high-quality economic development. The transfer mechanism is one of the policies that many investors believe can have an immediate effect on the secondary market, and the clear transfer mechanism has also given investors and listed companies of the Beijing Stock Exchange a 'reassuring pill'."
In fact, the Beijing Stock Exchange is in the early stage of market construction and has not yet formed a stable valuation center, belonging to the "investment depression and policy highland". As of September 1st, there are 217 existing listed companies on the Beijing Stock Exchange, and a large number of high-quality enterprise stocks are undervalued.
The relevant person in charge of the Guide Fund told reporters, "The board transfer system will help attract more small and medium-sized enterprises to land on the Beijing Stock Exchange, improve the enthusiasm of investors to participate, and significantly improve the liquidity and valuation level of the Beijing Stock Exchange. We hope that the board transfer policy can be implemented as soon as possible, and promote the early sunset of cases."
Market participants believe that after the relevant mechanisms are further improved, the board transfer will be implemented steadily and orderly.
