The recent announcement from the Xi Jinping Jintao of China, the investment community began to listen. In his statement, he claimed that China would establish a new Beijing-based stock exchange.
Read on to find out how this affects your investment and what it means for the Chinese economy.
How many stock exchanges are there in China?
Currently, there are two stock exchanges in China. One is based in Shanghai and the other is south of Shenzhen. The official names are Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE).
total Market first For companies listed on these exchanges, it’s about $ 10 trillion (£ 7.2 trillion). Therefore, a lot of money is already floating in these markets. China’s third stock exchange should mean more money flowing through China.
Why is China creating a new stock exchange?
It’s been a busy time for many Chinese companies these days. They are warned of imminent regulatory crackdowns and undefined rules that will be imposed.
Some Chinese companies are listed on the US Stock Exchange, including: NYSE and Nasdaq.. This is mainly because it can be easier to create a list and raise money in the United States. However, these new rules of arrival in China could mean that some companies will be expelled from the US stock exchange.
All of this brings a lot of uncertainty to some large Chinese companies. Part of the motivation behind the intervention is to limit the power of some large domestic companies.
This new Chinese stock exchange is aimed at small businesses. Therefore, this could be a government way of trying to do something positive for SMEs, as well as imposing restrictions on large companies. The new exchange should make it easier for more companies to raise money by selling their shares in the open market.
When will the new exchange open?
The intention to open a new exchange was announced just a few days ago.
No one knows when China will actually open an exchange. This is a type of effort that usually takes some time, and sometimes years. But China’s infrastructure moves at high speeds, so it’s no wonder that all of this integrates at high speeds.
What does China’s new stock exchange mean for investors?
All of this is interesting, but you’re probably wondering how this will affect you. investment Journey.
Now, the potential limits are already affecting some big Chinese stocks, lowering stock prices. Therefore, if you are investing in a fund that includes some of these companies, your portfolio may have been hit a bit.
China is still under the umbrella of “emerging markets”. Therefore, the success of this new stock exchange has the potential to increase the value of funds and investments in some emerging markets. But China never likes simple play when it comes to business and finance, so it wouldn’t be surprising if there were a few more hurdles.
What’s next for China?
Creating a new exchange to support small businesses seems easy enough, but who knows what’s coming next from China?
If you are considering investing in the Chinese market, do a thorough research and anticipate the unexpected. There may be good opportunities from within the country, but it’s probably a bumpy road.So, in case of volatility, just like any other investment, keep in mind that you may earn less than you. investment..
Was this article helpful?
Some of MyWalletHero’s offers are from our partners — that’s how we make money and keep this site going. But does it affect our reputation? No. Our commitment is you. If the product is not good, our rating reflects it or we do not list it at all. We also aim to showcase the best products available, but we do not review all the products on the market. Click here for details.. The above statement is for The Motley Fool only and is not provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, a subsidiary of Amazon, is a member of The Motley Fool’s Board of Directors. Motley Fool UK recommends Barclays, Hargreaves Slan’s Down, HSBC Holdings, Lloyds Banking Group, Mastercard and Tesco.
China wants to set up a new stock exchange in Beijing
https://www.fool.co.uk/mywallethero/china-hoping-to-create-a-new-stock-exchange-in-beijing/ China wants to set up a new stock exchange in Beijing