Shenzhen Stock Exchange

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Shenzhen Stock Exchange
SZSE Logo.gif
Founded 1990
Headquarters Shenzhen, China
Key People President and CEO Ms.Liping Song
Products Cash equities, bonds, ETFs, warrants
Website http://www.szse.cn/main/en/

The Shenzhen Stock Exchange (SZSE) is the largest in China by trading volume, with average daily turnover of about $50 billion in 2016.[1] The exchange celebrated its 20th anniversary of trading in 2010. The SZSE has signed co-operation agreements with exchanges in Thailand and Hong Kong, as well as with global index provider Standard & Poors.

History

The SZSE was founded in late 1990 under the ownership of the Shenzhen Securities Clearing Corporation (SSCC) and the regulatory supervision of the China Securities Regulatory Commission and grew significantly to become the second-largest exchange by market cap in China after the Shanghai Stock Exchange. In 2001 the Shenzhen Stock Exchange gained independence from the SSCC and became owned and operated instead by the newly-formed China Securities Depository and Clearing Co., the parent company of the Shanghai Stock Exchange.[2] In 2004 the Shenzhen Stock Exchange had eight listed companies, with new listings required to be small and medium enterprises (SMEs) only. By May 2008 the SZSE listed 897 securities in 697 companies[3]

In mid-2009 the SZSE teamed up with leading global index provider Standard & Poors (S&P) to jointly develop indices and other products for global investors on the Chinese market.[4] Under the agreement, SZSE will allow S&P to use its maket data to produce benchmark investible indices on the Chinese market while S&P will licennse its flagship S&P 500 Index to the exchange that will allow Chinese institutional investors to invest in a listed fund based on the index.

The Shenzhen Stock Exchange launched a long-planned small-cap exchange known as the Growth Enterprise Market (GEM) and also as ChiNext, which debuted in 2009 to such enthusiasm that trading was briefly suspended on its opening day.[5] The 28 companies listed on the first day were all small, privately-held enterprises in contrast to the mostly government enterprises that list on the Shanghai and Shenzhen exchanges.

By late November 2009 the Shenzhen Stock Exchange had grown to a total of 801 listed companies and traded 1,126 different listed securities.[6] [7]

In November 2009 the exchange began pursuing a co-operative relationship with the nearby Hong Kong Exchanges and Clearing that would allow the two exchanges to list each other's exchange-traded funds (ETFs),[8] including funds tracking the value of the Shenzhen Component Index and the Shenzhen 100 Index in Hong Kong and another tracking the Hang Seng Index in Shenzhen. The SZSE also inked a preliminary agreement with the Stock Exchange of Thailand that would allow a similar agreement between the two exchanges.[9]

In April 2010 the Shanghai Stock Exchange and the Shenzhen Stock Exchange began allowing some local brokers to short sell and trade on margin for the first time. Brokerages Guosen, Citic, Haitong, Guotai Junan, GF and Everbright participated in the trial program.[10] Capital markets analysts believe the decision to allow margin trading and short selling is linked to China's introduction index futures on its equities markets in mid-April. They exchanges said the move was a way to ease the market into products like stock index futures that require even greater liquidity and carry higher risk, the Wall Street Journal reported.[11]

Products

In September of 2019, the Chinese regulator approved three ETFs linked to commodities futures indexes to be listed on the Shenzhen Stock Exchange. They would be the first exchange-traded funds that track Chinese domestic energy, metal and agricultural futures. [12]

Technology

The exchange introduced technology upgrades in 2016 that brought it closer in line with its international counterparts. The order-matching engine has a response time of 1.1 milliseconds, one-hundredth of the previous system, and order processing capacity was tripled to 300,000 trades a second. The exchange also installed a new data center equipped with 5,000 server cabinets for co-location. The changes reflected the rapid development of China’s equity markets, which were only officially established in 1990.[13]

Key People

Song Liping was appointed president and general manager of the Shenzhen Stock Exchange in March 2008 by the China Securities Regulatory Commission. Ms Song, formerly executive vice president of the SZSE, replaced Zhang Yujun, who took over as president of the Shanghai Stock Exchange.[14]

References

  1. China's Biggest Exchange Amps Up Trading Technology Systems. Bloomberg.
  2. A History of the Shenzhen Stock Exchange. AssociatedContent.com.
  3. Market Overview. Shenzhen Stock Exchange.
  4. S&P Strengthens Relationship with Shenzhen Stock Exchange. Standard & Poors.
  5. A New Chinese Stock Exchange Opens With a Surge. New York Times.
  6. Market Overview. Shenzhen Stock Exchange.
  7. Year-to-date monthly statistics. World Federation of Exchanges.
  8. Shenzhen to integrate capital markets with Hong Kong. CCTV (China).
  9. SZSE signs MOU with Thailand Stock Exchange. Shenzhen Stock Exchange.
  10. Launch of Margin Trading, Short Selling. China Daily.
  11. China Rolls Out Margin Trading, Short Selling. Wall Street Journal.
  12. China Approves First Commodity-Linked Exchange-Traded Funds. Bloomberg Quint.
  13. China's Biggest Exchange Amps Up Trading Technology Systems. Bloomberg.
  14. China Shuffles Key Personnel In Stocks Sector. Wall Street Journal.