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Chinese public markets can be a bit confusing for the everyday investor. While a bulk of the most well-known Chinese companies are primarily listed on the Hong Kong Stock Exchange, Mainland China also has exchanges of its own - one of which is based in Shenzhen.
The Shenzhen Exchange is particularly interesting for Chinese investors who wish to participate in some of the fastest growing companies in Mainland China. This is due to the fact that the Shenzhen exchange hosts considerably more technology companies than its Shanghai counterpart. The exchange is also known for its strict regulations and compliance requirements.
The exchange is divided into two boards; the main board and the ChiNext. ChiNext is home to many innovative technology companies and hosts a total of over 1,200 companies.
The pre-market sessions on the exchange last from 09:15 to 09:25 am and the core trading hours are from 09:30 am to 11:30 am and 1:00 pm to 3:00 pm China Standard Time.
The listing requirements on the Shenzhen Stock Exchange can vary based on the relevant board:
The Shenzhen Stock Exchange generates revenue through multiple sources, such as:
The Shenzhen Stock Exchange has taken important steps in reducing the listing fees on the exchange and has shifted its focus to revenues generated by market data services. Some of the fees charged for these services include:
These are only a handful of fees charged by the Shenzhen Stock Exchange, which generates a bulk of its revenues by licensing its trading systems and charging fees to institutional market participants.
The ChiNext board is a growth enterprise market similar to Nasdaq that was launched by the Shenzhen Stock Exchange in October 2009.
The board is designed to provide a platform for innovative, high-growth companies in Mainland China that are not yet ready for listing on the main board of the SZSE or the Shanghai Stock Exchange.
In general, for a company to obtain a listing on the ChiNext board, it must have a minimum market capitalization of RMB 1 billion (approx $155 million) and must have a profitable track record over the past 12-month period.
Once listed, companies on the ChiNext board are subject to ongoing disclosure and reporting requirements, including quarterly and annual financial reporting, as well as regular updates on key business developments. Trading on the board is conducted in a fully automatic manner.
The SZSE Index is the most followed index on the Shenzhen Stock Exchange and tracks 100 of the largest companies listed there.
The SZSE 100 is a market capitalization-weighted index that includes 100 of the largest companies listed on the SZSE. The index is composed of companies from a variety of industries, including information technology, financial services, consumer discretionaries, etc.
The SZSE 100 Index is considered to be a key benchmark for the performance of the Shenzhen stock market and is widely used by investors and analysts to track the overall health and trends of the market.
The ticker code for the SZSE 100 Index is 399333.
The top 10 constituents of the SZSE 100 are weighted as follows:
|Wuilangye Yibin||000858||4.93%||Consumer Staples|
|Midea Group||000333||4.35%||Consumer Discretionary|
|Luzhou Lao Jiao||000568||2.30%||Consumer Staples|
The SZSE Composite is the benchmark index of the Shenzhen Stock Exchange, which tracks the top 500 companies listed on the exchange.
Similarly to the SZSE 100, the composite index is also weighted by market capitalization. The index includes both A-shares and B-shares, which are different classes of shares that are denominated in CNY (A-shares) or foreign currency (B-shares).
The SZSE Composite Index is considered to be a broad-based benchmark for the performance of the Shenzhen stock market and is widely used by investors and analysts to track the overall health and trends of the market.
|Sector||Number of Constituents||Weight|
SZSE 100 and Component are not the only indexes available on the Shenzhen Stock Exchange. Others include:
No. China is home to three stock exchanges - Shenzhen, Beijing, and Shanghai. While Shenzhen and Shanghai are comparable in size, the Shenzhen exchange is slightly larger in terms of total market capitalization.
There are a total of over 2,700 companies listed on the Shenzhen Stock Exchange. Out of which, 1,200 are listed on the tech-focused ChiNext board, while the remaining 1,500 are listed on the main board.
CATL is the largest company listed on the Shenzhen Stock Exchange, with a total market cap of over RMB 960 billion (approx $144 billion).