CCTV made the special interview on Oct.23 with Ms. Song Liping, General Manager of the Shenzhen Stock Exchange.
She told that as the ChiNext board kicked off after ten-year preparation, the SZSE will face more challenge and get heavy pressure. The debut of ChiNext trading is set on Oct. 30, and more work shall be done, the time to share the pleasure is very short. The launching of ChiNext board is of very important significance to not only the establishment of innovation country but also the improvement of capital market functions.
The launching of the ChiNext board is of very important significance.
She expressed that the launching of ChiNext board represents the great significance with the high value. First, the ChiNext board will perfect the fundamental function of the capital market. The fundamental function of the capital market has the following aspects, one is to satisfy the financing needs of companies in different development stages, and the other point is to meet the needs of investors with different risk preference for diversified investment products. Second, the introduction of investor appropriateness management has the profound significance in the buildup of ChiNext board. The premise to bring out the riskier financial derivatives is that investors must be classifies for management and different products shall be put out for different investors.
The pricing for ChiNext companies is a problem even for the whole world.
In the interview, the CCTV reporter asked a question whether the offering price is too high in view of that the average price-to-earnings ratio was more than 50 times for 28 companies to be listed on the ChiNext, even reaching up to 82.2 times. Ms. Song said the pricing for the listed companies is a problem even in the world. She thought that technically speaking, the high price for ChiNext companies is very normal, but we need to understand there is much gap between China’s ChiNext market and the mature market. She admitted that there are some immature phenomena in the pricing for these listed companies.
It is not a problem that proceeds are over raised due to the standardized corporate management.
The first batch of 28 companies that are launching IPOs on the ChiNext have raised a combined 15.48 billion yuan (US$2.27 billion), 119 percent up compared with the expected amount 7.078 billion yuan. Ms. Song added that in order to regulate the management of over-raised proceeds, the SZSE has design the special account deposit system for ChiNext companies with reference to the experience from SME board raised funds.
At the end of the interview, Ms. Song also mentioned that to curb speculation, the SZSE has ruled any share on the ChiNext board that increases or decreases more than 80 percent on its first day of trading would be suspended until three minutes before the market's close.