The Development Research Center of the Shanghai Stock Exchange (SSE) held an experts' symposium themed with "Talks about Development of the Capital Market in Honor of the 18th National Congress of the Communist Party of China" on November 5, with a view to promoting the innovation and development of the capital market and enhancing its capability of serving the real economy. At the symposium, experts and scholars from companies in securities, fund and insurance sectors as well as researchers from the SSE reviewed the progress of the Chinese capital market in the past decade and looked ahead into the innovation and development of the market in the future.
SSE Chief Economist Hu Ruyin pointed out at the symposium that since taking office, Chairman Guo Shuqing of the China Securities Regulatory Commission had devoted himself to propelling the development of the capital market in a more open, law-based, market-oriented and internationalized way, carrying out reform and innovation in various aspects, advocating value investing and rational investment, deepening the reform in the new share issuance system, pushing forward the dividend distribution of listed companies, rationalizing the delisting system, developing the over-the-counter market, and implementing the opening-up strategy. All this brought both opportunities and challenges to the SSE in the construction of the blue chip market. Apart from its efforts on the construction of the multi-tiered blue chip market, the SSE has been long committed to keeping close relations with members of the same circle, soliciting opinions and suggestions from the market, promoting the development of the bond market, the wealth management market, and the derivatives market, and enhancing the construction of the blue chip market in an all-round way, in a bid to provide investors with diversified products and services and improve the capability of serving the capital market and the real economy.
At the symposium, Hu Ruyin made a systematic review on the development of the Chinese capital market in the past decade. According to him, by the end of 2002, there were only 1,223 companies listed on the SSE and the Shenzhen Stock Exchange, with the market capitalization less than RMB3.8 trillion. After ten years' development, there are 2,494 companies listed on the two exchanges as of last weekend, with the number of investors' accounts exceeding 200 million and the market capitalization reaching RMB21.8 trillion in total. According to the latest ranking list of the World Federation of Exchanges, the market capitalization of stocks in the capital market in China's mainland ranks the third in the world and the first in Asia. Hu stressed that the Chinese capital market achieved a qualitative leap while making great quantitative changes.
The experts present at the symposium agreed that the capital market made significant contributions to the establishment of the modern enterprise system and the development of the real economy. In the decade, a number of state-owned and private enterprises improved their own competitiveness through restructuring and listing as well as merger, acquisition and reorganization, and became industry leaders renowned at home and abroad. The current capital market has developed from a small one and made itself more open to enterprises of all sizes.
In the decade, the Chinese capital market has gone through a rise in the number of listed companies and the market capitalization, and a fall in the total price-earnings ratio from 36 down to lower than 13. A sharp decline in the average price-earnings ratio implies a relatively full release of market risks, a rise in investment attraction and a stable foundation for the long-term development of the market. At present, the dividend yield ratio of the SSE 180 Index big-cap blue chips is about 2.3%, higher than that of Standard & Poor's 500 Index, which embodies the unique investment value of the Chinese stock market.
The experts said that the Chinese capital market had made remarkable progress in many fields in the past ten years. The market rectification has been reinforced while the market mechanism, the market structure and the institutional environment have been improved. In particular, while launching a lot of innovative work and procedures, the capital market has put forward many innovative ideas of fundamental importance since last year. The full implementation of the ideas would narrow the gap between the Chinese capital market and the mature markets.
As for the future development of the capital market, the experts present at the symposium expressed their optimistic attitudes toward it and contributed their sound ideas.
Chief Economist Yang Chengzhang of Shenyin & Wanguo Securities Co., Ltd. stressed that in the future, the Chinese securities market should put more focus on the services for the real economy than the development of finance for the sake of finance. He thought that the narrowing gap between China and developed countries, the western and eastern part of China, as well as the urban and rural areas of the country would become a new driving force for the economic development of China under the circumstance of a decline in growth dividend.
Senior Economist Lin Caiyi of Guotai Junan Securities Co., Ltd. said that compared with mature markets, China was confronted with some disadvantages in developing the bond market so great efforts should be made on the development of the company credit bond market in the future. She emphasized that the Chinese capital market should keep on with the market-oriented way for further development, and attach importance to the deepened reform in the new share issuance system. Furthermore, the exchanges should accelerate the transition into companies and shoulder the responsibility for reform and innovation.
Chief Strategist Shao Yu of Orient Securities Company Limited held that China's economic growth in the future would depend on the rationalization of three driving forces, namely deepened urbanization, a great era of consumption, and internationalization of RMB. At present, the RMB-dominated capital market should be built and the RMB-denominated financial market expanded in an all-round way to meet the demand for internationalization of RMB. He also said that the dividend distribution system of listed companies promoted by the regulatory authorities would achieve positive effects on the market development.
Deputy General Manager Zhu Anping of the Research Division of China Pacific Insurance (Group) Co., Ltd. said that the Chinese capital market should speed up reform and innovation to provide insurance companies and other institutional investors with more investable products. Besides, equity and ETF options, warrants, and other risk management instruments should be offered to bring all-round convenience to investors in their asset allocation and risk prevention.
Chief Economist Yang Ming of HuaAn Fund Management Co., Ltd. and Deputy Director Liu Yu of the Research Division of Fullgoal Fund Management Co., Ltd. respectively made an in-depth analysis of the construction of the blue chip market and expressed their views on future investment strategies. They held that the defects currently existing in the Chinese securities market would bring huge spaces and institutional dividends to the market development. Besides, they were convinced of a brighter future for the Chinese capital market.
FTSE Mondo Visione Exchanges Index:
Shanghai Stock Exchange Organizes Experts To Talk about China's Capital Market
Date 07/11/2012