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China's Two Stock Exchanges to Be Merged within Two Years
China's two stock markets in Shanghai and Shenzhen, now drawing some 50 million investors, are expected to combine into one in order to boost stock business.
The merge of the two markets was approved by related government department last month and is expected to be completed in two years, according to an official with the Shenzhen Stock Exchanges.
According to the plan, the nearly 500 listed enterprises in Shenzhen issuing A shares to domestic holders will be merged into Shanghai market, a move to increase Shanghai's A-share listed firms to some 1,000.
The merger design also pinpoints the establishment of a Nasdaq-style second board in Shenzhen for high-tech firms. The two main boards will be merged after the second board in Shenzhen was put into operation.
The official from the Shenzhen stock market also said that during the two-year transition period, Shenzhen's A-share market will keep running as usual, but no longer accepts new shares.
Currently, market value of the A-shares at the two exchanges totalled US$500 billion, the largest in Asia. Impact on the B-shares, which were issued for overseas investors only, is still unpredictable, some experts said.
As China's stock investors increased to about 50 million -- the world's second after the US, the growth of investors and listed companies made supervisory work more difficult than before.
The merge will make the supervision more standardized and transparent when all listed companies will be managed by one unified regulatory institution.
The merger will also lower operation fees, help enterprises to lure much-needed capital and get prepared for China's pending entry into the World Trade Organization.
(Source: Chinadaily.com.cn)
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