China’s new Beijing Stock Exchange kicked off trading today, with a total of 81 stocks listed.
A group of 10 companies which had conducted initial public offerings (IPO) saw big surges in their shares, causing a circuit breaker and a temporary halt in the trading.
Henan Tongxin Transmission Co, a manufacturer of automobile transmission devices surged 504%.
HeBei Raisesun Information Technology Co was another big gainer, rising 280%.
Trading commenced just two months after President Xi Jinping initially announced plans for the bourse, with more than 4mln investors having registered accounts to trade, according to Reuters.
Only investors with assets worth at least US$78,347 in their stock account are initially able to trade in the exchange, which operates through a registration-based IPO mechanism.
In this method, investment banks decide whether a firm is eligible for an IPO and the government is responsible for reviewing the necessary documents.
Many of the companies listed are from sectors such as software, pharmaceutical and high-end manufacturing.
With existing exchanges in Shanghai and Shenzhen now focused on larger companies, the Beijing market has been created to focus on small and medium sized enterprises, in line with President Xi’s new emphasis on reducing the wealth gap in China.
