"The SSE has basically concluded its preparatory work on the business rules and technologies concerning listing and trading on the International Board for propelling the construction of the International Board by active and in-depth study on information disclosure, continuous supervision, cross-border law enforcement, investor protection and other major issues, with an aim to create favorable conditions for launching the International Board," said Governor Geng Liang of the Shanghai Stock Exchange (SSE) on December 18 at the "9th China Cooperate Governance Forum" held by the exchange. Geng also summed up at the meeting the development of the exchange in the past 20 years.
Total stock market capitalization on the SSE reaches RMB18.5 trillion.
Geng said that the SSE had initially formed a blue-chip market structure through its two decades' efforts. So far, a total of 892 companies are listed on the exchange, with a total stock market capitalization of RMB18.5 trillion and a daily turnover of RMB126 billion.
"Thanks to the rapidly growing market scale, the SSE has held an increasingly important position on the international securities market. The SSE, developed into the biggest emerging market in the world, is now one of the major exchanges worldwide," said Geng, "The exchange has attracted a large number of large-scale and high-quality enterprises dominating in the national economy to go public. Besides, an array of listed companies has seen rapid growth and optimization through merger, acquisition, restructuring and overall listing. The blue-chip structure of the exchange has basically taken shape."
Statistics show that currently, 2, 25 and 245 listed companies boast the total market capitalization of over RMB1 trillion, between RMB100 billion and RMB1 trillion and between RMB10 billion and RMB100 billion, respectively. These 280 or so companies are the core of the blue-chip structure of the exchange. In the meanwhile, a number of medium-sized listed companies are growing in a sustainable way through adjustment to structure, shift in development mode and maintenance of growth. At present, 42 domestic companies are among the Fortune Global 500, among which 33 are listed on the SSE.
Geng also said that the SSE had always regarded corporate governance improvement as the important link in building the blue-chip market in the past 20 years. The SSE has strengthened supervision over connected transactions and stock trading of controlling shareholders, directors, supervisors and senior management. Last year, the SSE examined more than 40,000 reports of listed companies in various categories, implemented more than 4,500 times of special trading suspension, issued more than 2,300 regulatory letters, conducted 3 all-round inspections over illegal trading of directors, supervisors and senior executives, and disposed of illegal trading for 55 person times.
Efforts should be made to propel the construction of blue-chip market.
Looking into the future, Geng said that four tasks should be done well to impel the construction of the blue-chip market. Firstly, corporate governance of listed companies should be perfected in an all-round way. The SSE will continuously urge listed companies to improve the quality of their boards of directors and information disclosure, perfect their mechanisms of internal operation and investor protection, fully perform their social responsibilities and adopt best practices of corporate governance, thus constantly enhancing the appeal of China's capital market and its competitiveness in the international arena.
Secondly, endeavors should be made to promote large and medium-sized high-quality enterprises to go public through restructuring. Presently, the SSE boasts 280 large and medium-sized enterprise, or 30% of the total listed companies, with the total market capitalization of over RMB10 billion. So far, many a large and medium-sized high-quality enterprise, industry leader and backbone enterprise have not completed restructuring. The SSE will, in the next step, provide comprehensive services for the restructuring and listing of large and medium-sized enterprises in such sectors as energy, military industry, culture, railway and nuclear power.
Thirdly, reorganization, merge and acquisition of listed companies will be continuously promoted. In this regard, the SSE will further impel the task by improving the quality and efficiency of reorganization, merge and acquisition, and encourage controlling shareholders to inject high-quality assets and projects into listed companies, with an aim to promote overall listing of enterprises and foster more optimized and competitive listed companies.
Fourthly, vigorous efforts should be made to pace up the construction of the International Board. Both domestic and overseas listed companies should be included in the scope of blue chips. The SSE has in the recent years spared no efforts to turn itself into a blue-chip market with international influence by studying and propelling the International Board construction. So far, the SSE has finished the preparatory work on the business rules and technologies concerning listing and trading on the International Board. Through an in-depth study on the information disclosure, continuous supervision, cross-border law enforcement, investor protection and other major issues, the SSE has striven to create every condition for launching the International Board.