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Shenzhen Stock Exchange (SZSE)

Shenzhen Stock Exchange

What is the Shenzhen Stock Exchange?

Shenzhen Stock Exchange (SZSE) is one of the three main stock exchanges operated in China. As the name suggests, the exchange is found in the city of Shenzhen.

More than 1,500 companies are listed on the exchange, with many of them controlled by the Chinese authorities. It's open on every weekday, excluding public holidays.

As one of the largest stock exchanges in Asia, the Shenzhen often hits the headlines during periods of economic turbulence, when the media is paying close attention to the world's financial markets.

Key takeaways:

  • The Shenzhen Stock Exchange is one of the major stock exchanges in China, located in the city of Shenzhen.
  • Shenzhen Stock Exchange was established in 1990 and is the second-largest stock exchange in mainland China, following the Shanghai Stock Exchange.
  • The Shenzhen Stock Exchange primarily focuses on the trading of small and medium-sized enterprises (SMEs) and high-growth companies.
  • It operates two main boards: the Main Board, which includes large-cap stocks, and the Small and Medium Enterprise (SME) Board, which caters to smaller companies.

What you need to know about the Shenzhen Stock Exchange

The exchange was established in December 1990 and is supervised by the China Securities Regulatory Commission.

Along with equities, the exchange allows for bond and mutual fund trading. The bonds listed on the exchange generally comprise treasury bonds, credit bonds and convertible bonds.

The Shenzhen is a member of the World Federation of Exchanges, as well as the Asian and Oceanian Stock Exchanges Federation. It launched an exchange similar to the Nasdaq in 2009, called ChiNext, which focuses on smaller technology businesses.

The Shenzhen Stock Exchange vs the Shanghai Stock Exchange

The Shenzhen Stock Exchange (SZSE) and the Shanghai Stock Exchange (SSE) are the two major stock exchanges in mainland China, each playing a significant role in the country's capital markets. While they have some similarities, there are also notable differences between them.

Establishment and Focus:

  • The SSE was established in 1990 and is the older of the two exchanges, while the SZSE was established in 1991.
  • The SSE primarily focuses on large and established companies, including state-owned enterprises and blue-chip stocks.
  • The SZSE, on the other hand, focuses on small and medium-sized enterprises (SMEs), high-growth companies, and emerging industries.

 

Market Capitalization:

  • The SSE has a higher market capitalization compared to the SZSE. It is home to some of China's largest and most prominent companies, including those listed on the SSE 50 Index and SSE 180 Index.
  • The SZSE has a relatively smaller market capitalization but is known for hosting innovative and technology-oriented companies.

 

Listing Requirements:

  • The SSE has stricter listing requirements, making it more challenging for companies to go public on the exchange.
  • The SZSE has more flexible listing requirements, which attract smaller companies and startups seeking capital funding.

 

Industry Focus:

  • The SSE has a broader industry representation, including sectors such as finance, manufacturing, energy, and consumer goods.
  • The SZSE has a particular emphasis on technology-related industries, such as information technology, biotechnology, new energy, and other emerging sectors.

 

Investor Participation:

  • Both exchanges allow participation from domestic and qualified foreign investors.
  • The SSE has historically attracted more international investor attention due to its larger market size and presence of established companies.
  • The SZSE has been gaining attention for its focus on innovative and high-growth companies, attracting investors looking for potential opportunities in emerging industries.

 

Trading Platforms:

  • Both exchanges operate electronic trading platforms: the Shanghai Stock Exchange (SSE) uses the Shanghai-Hong Kong Stock Connect, and the Shenzhen Stock Exchange (SZSE) uses the Shenzhen-Hong Kong Stock Connect, allowing cross-border trading between mainland China and Hong Kong.

Find out more about the Shenzhen Stock Exchange

The Shenzhen is one of the biggest exchanges in China, along with the Shanghai Stock Exchange and the Hong Kong Stock Exchange.

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