Shanghai stock exchange has lost status of largest volume of traded shares in China

Almaty. June 29. Silkroadnews – Shanghai stock exchange has lost its status of the largest volume of traded shares in China, which held for the past ten years, RBC reports.

The publication notes, the trading platform, the oldest in the country, has been outstripped by a division of the Shenzhen Stock Exchange – Shenzhen’s Small and Medium Enterprise Board (SME Board) trading shares of non-public companies.

SME Board operates since 2004. On May 17, 2016, its exchange-trade for the first time slightly exceeded the one of the Shanghai stock-exchange, since then both exchanges indicators were almost equal. For the last five days both exchanges turnover made around $27.1 billion.

Over the past 12 months the Shanghai stock exchange turnover fell by 86%. Within three weeks Shanghai and Shenzhen Stock Exchange lost more than 30% of capitalization – about $3.5 trillion – after June 12 of last year, when, after a peak of 5178.19 points, SSE Composite Index started to decrease.  That time, and also later against the background of the Chinese stock market’s collapse at the beginning of this year, investors have started to invest more in small and medium-sized enterprises, avoiding dealing with overvalued shares in state companies.

Investors turned toward SME Board trading shares of 790 companies with market value of $1.7 billion on average for each.

According to the report, more than 100 million individual traders are investing in environmentally friendly companies, companies in the field of e-commerce and manufacturers of lithium-ion batteries.

SME Board offers more opportunities for special, non-standard investments, said Ken Chen, an analyst at KGI Securities Co. in Shanghai.

According to the analyst of Shenwan Hongyuan Group Fu Jintao, even if in the coming months SME Board and Shanghai Stock Exchange may compete with each other for status of the largest stock exchange in terms of trading shares, SME Board represents the future of the Chinese stock markets.

“In the short term trend can stop. In the long run there is a hope that the new economy will become the future of trading in the stock markets,” he said.

On June 24 SME Board exchange trading exceeded the exchange trading of Shenzhen Stock Exchange by 130%, it also exceeded exchange trading of ChiNext unit that mostly trades in stocks of the high-tech companies by 46%.