about china stock exchange

1. Course Name :Corporate Finance
Section :06
Proposed To
Syed A.Mamun,Phd,FCMA
Associate Professor of Finance
School of Business
Southeast University , Bangladesh
Proposed By
Abdul Razzak
ID:2018110005061
Md Mahatab Uddin Shamim
ID:2018210005035

2. REPORT ON
​CHINA STOCK EXCHANGE

3. History of China Stock Exchange
The history of China's Stock Market is elaborate and complex, reaching back to the 19th
century. The entire market is based around the Shanghai Stock Exchange, but tied directly to two
other exchanges in Hong Kong and Shenzhen. The establishment of the stock exchange took a
long time, as did the growth in the business trading with foreign markets. At times in history, the
exchange has been closed for reasons including war.
The Treaty of Nanking in 1842 established an area in Shanghai known as the International
Settlement. This development prompted the emergence of foreign markets in the area. This
culminated in in the introduction of securities trading in the late 1860s. In June 1866, the first
share list began to appear prompting a number of banks and joint-stock companies to be formed.
This was coupled by an interest in diversification for investors and trading houses.
In 1920, the Shanghai Securities and Commodities Exchange was established. This was followed
the next year by the Shanghai Chinese Merchant Exchange. In 1929, the markets combined and
officially formed the Shanghai Stock Market. Foreign investor invest in the market but was
closed in 1949 during the Communist Revolution.After revolution Deng Xiaoping took power
over the nation.In 1980 ,Socialist market economy was established then China opened a
secondary exchange in Shenzhen aimed more at technology and government securities.1880s,
the Chinese mining industry boomed. In 1891, the Shanghai Share Brokers' Association was
established, creating China's first stock exchange. Most of the shares were supplied by local
companies and banks took the opportunity to dominate the majority of the private shares
​Introduction of China Stock Exchange
There are two public stock exchange markets in China such as Shanghai Stock Exchange (the
“SSE”) and Shenzhen Stock Exchange (the “SZSE”). As of December 2012, there are 954
companies listed on the SSE with a total market capitalization of RMB15,869.844 billion . As of
May , 2013, there are 1,537 companies listed on the SZSE with a total market capitalization of
RMB 8,101.91374 billion . Both the SSE and SZSE operate the Main Board while the SZSE also
runs the Small & Medium Size Enterprise Board (“SME”) and the ChiNext Board. The Main
Board is designed for large scale companies which intend to solicit large amounts of public
funds. SME adopts the same listing requirements as the Main Board while targeting companies
with a smaller scale for equity flow. The ChiNext Board provides an important platform, with
less stringent listing criteria, for those enterprises engaged in independent innovation businesses
and other growing venture enterprises to solicit public funds. The Stock Exchange of Mainland
China is operated by SSE and SZSE, as membership institutions, and is directly governed by the
China Securities Regulatory Commission (“CSRC”).

4. ​Here​ ,​ChiNext​ is a NASDAQ -style board of the The Shenzhen Stock Exchange first batch of
firms started trading on ChiNext on October 30, 2009.As of June 2015, there were 464 firms
listed on ChiNext.ChiNext aims to attract innovative and fast-growing enterprises, especially
high-tech firms.Its listing standards are less stringent than those of the Main and SME Boards of
the Shenzhen Stock Exchange
People have only been willing to turn over personal power to the state in return for rapid
increases in personal wealth. One way to boost wealth is by encouraging investment in China
stock Market.That allows companies to rely less on debt, and more on selling stocks, to fund
growth. It also helps the tech companies that are listed on the Shenzhen exchanges. China
recently installed the Connect program between the mainland exchanges and the Hong Kong
stock market.
Development of China's Capital Market
​The development of China's capital market has been closely linked to and driven by China's
economic reforms, and in return contributes to the economic development. The historical review
of the development of China's capital market shows that the country's economic liberalization
and reform starting in the late 1970s has given birth to China's capital market. As China's market
economy is evolving, there is an increasing demand for more market-oriented resource
allocation, leading to the gradual establishment and development of China's capital market.
In retrospect, China's capital market has gone through three phases of development:
Phase I: From early 1978 to 1992; China initiated full-scale economic reform, and China's capital
market began to emerge along with the incorporation process of Chinese enterprises.
Phase II: From 1993 to 1998, with the establishment of the China Securities Regulatory
Commission (CSRC) as a milestone; China integrated its capital market and supervision regime.
The regional pilot programs of supervision regime restructure are expanded nationwide and the
national capital market began to emerge and evolve.
Phase III: From 1998 onwards, with the promulgation of the Securities Law as a key milestone;
the legal status of China's capital market in the economy has been formalized and strengthened,
and a series of major reforms are implemented to facilitate further development.

5. Issuance Conditions for Initial public offering (IPO)
The issuer shall be a company limited by shares that is duly established and validly
existing by law. When a limited liability company is lawfully converted into a company
limited by shares with the approval of the State Council, it may issue shares to the
public by means of public share offering
Listing Conditions of IPO
The issuer that applies to CSE for listing its IPO shares shall meet the following conditions:
1. Its shares have been issued to the public with the approval of the CSRC;
2. Its total capital stock is no less than RMB 50 million;
3. Its publicly issued shares account for no less than 25% of its total shares; where its total
capital stock is more than RMB 400 million, its publicly issued shares shall account for no less
than 10% of its total shares;
4. It has no record of major legal violations within the last three years and its financial and
accounting reports do not contain any false records;
5. Other requirements imposed by the CSE.
China Stock Exchange (CSE) Guide to Securities Listing Procedures
1. After securities issuance is completed, the issuer and its sponsor and lead underwriter shall, in
accordance with the requirements of the CSE Stock Listing Rules and other relevant regulations,
promptly prepare and submit application documents for securities listing.
2. The issuer, the sponsor and the lead underwriter shall ensure the accuracy and completeness of
securities listing data included in the listing application materials submitted to the CSE.
Securities listing data include the issue price (or the opening reference price on the first listing
day), the number of shares to be listed, the time of listing, the securities code, the capital stock
structure, and other relevant data
Documents Requirements
After the issuer completes issuance of its IPO shares with the approval of the CSRC, the issuer
and its sponsor shall apply to the CSE for listing by submitting the following documents:

6. 1. Listing application;
2. The CSRC document approving the IPO of the issuer;
3. Resolutions of the board of directors and the shareholders' meeting related to the issuance and
listing of the issuer's shares
4. A photocopy of the issuer's business license;
5. The issuer's articles of association;
6. The issuer's financial reports for the last three years audited by an accounting firm qualified to
engage in relevant securities and futures business;
7. Documents proving that all the issuer's shares are in the custody of the Shanghai branch of
China Securities Depository and Clearing Corporation Limited after the IPO was completed;
8. A capital verification report issued by an accounting firm qualified to engage in relevant
securities and futures business after the IPO was completed;
9. A detailed description of the shares held by the directors, supervisors and senior officers in the
issuer and the Declaration and Undertaking with regard to Directors, Supervisors and Senior
Officers;
10. Relevant details on the secretary to the board of directors to be employed or already
employed by the issuer;
11. A description of financial materials newly added pursuant to applicable provisions after the
IPO and before the listing and a statement on relevant material matters (if applicable);
12. The one-year lock-up certificate of the shares held by shareholders before the IPO;
13. Letters of commitment issued by the controlling shareholder and actual controller;
14. The latest prospectus and the full set of issuance application materials examined and
approved by the CSRC;
15. Listing announcement prepared pursuant to relevant requirements;
16. The sponsorship agreement and the listing sponsorship letter issued by the sponsor;
17. The legal opinions issued by law firms; and
18. Other documents as required by the CSE.

7. Financial Information
Audited Financial Statements
The applicant shall provide the auditing report and financial statements, the profit forecast report
and versification report, internal control report, extraordinary profit and loss statement that is
verified by the accounting firm as part of the listing documents. In addition, the applicant shall
also provide the financial statements and payment records of the taxes for the latest three (3)
years.
Applicable Accounting Standards
Applicants shall use Chinese GAAP to prepare their financial statements.
Period Covered by the Accounts
The accountants’ report must cover the three (3) financial years immediately preceding the
listing.
Equities Introduction
A-shares, or the RMB-denominated common shares, refer to any ordinary shares issued by the
domestic companies in China and to be subscribed and traded in RMB by domestic institutions,
organizations or individuals (excluding investors from Taiwan, Hong Kong and Macao).
B-shares refer to the RMB-denominated special shares with their par values marked in RMB in
their circulation and to be subscribed and traded in foreign currencies.

8. Securities List
A share
Code Short name
(in
Chinese)
Short name Full name
600000 浦发银行 SPD BANK
SHANGHAI PUDONG DEVELOPMENT BANK CO.,
LTD.
600004 白云机场 gbiac Guangzhou Baiyun International Airport Co.,ltd.
600006 东风汽车 DFAC Dongfeng Automobile Co.,LTD
600007 中国国贸 CWTC Co.,Ltd. China World Trade Center Company Ltd.
600008 首创股份 BEIJING CAPITAL BEIJING CAPITAL CO.,LTD
600009 上海机场 SIA Shanghai International Airport Co., Ltd.
600010 包钢股份 BSU Inner Mongolia BaoTou Steel Union Co.,Ltd.
600011 华能国际 HPI Huaneng Power International, INC.
600012 皖通高速 Anhui Expressway Anhui Expressway Company Limited
600015 华夏银行 HUAXIA BANK HUA XIA BANK CO., Limited
600016 民生银行 CMBC CHINA MINSHENG BANK
600017 日照港 RIZHAO PORT RIZHAO PORT CO.,LTD.
600018 上港集团 SIPG Shanghai International Port (Group) Co., Ltd
600019 宝钢股份 Baosteel Baoshan Iron & Steel Co., Ltd.
600020 中原高速
Zhongyuan
Expressway
Henan Zhongyuan Expressway Company Limited

9. B Share
Code Abbreviation Name Web Site
90090
1
INESA-IT INESA Intelligent Tech Inc. www.inesa-it.com
90090
2
SHIBEI HI-TECH SHANGHAI SHIBEI HI-TECH CO.,LTD. www.shibeiht.com
90090
3
DZT
DAZHONG TRANSPORTATION（GROUP）
CO.,LTD.
www.96822.com
90090
4
Shenqi
Pharmaceutical
Shanghai Shenqi Pharmaceutical Investment
Management Co., Ltd.
www.gzsq.com
90090
5
L.F.X LAO FENG XIANG CO.,LTD.
www.chinafirstpencil
.com
90090
6
ZYD Shang Hai Zhong Yi Da Co.,Ltd www.600610.com.cn
90090
7
PENGQI CO.,LTD PENGQI TECHNOLOGY DEVELOPMENT CO.,LTD www.600614.com
90090
8
SCAC SHANGHAI CHLOR-ALKALI CHEMICAL CO.,LTD. www.scacc.com
90090
9
- SHANGHAI HUAYI GROUP CORPORATION LTD. -
90091
0
HIGHLY GROUP SHANGHAI HIGHLY(GROUP) CO.,LTD. www.highly.cc
90091
1
Golden Bridge
Shanghai Jinqiao Export Processing Zone
Development Co.,Ltd.
www.shpdjq.com
90091
2
WGQ
SHANGHAI WAI GAOQIAO FREE TRADE ZONE
DEVELOPMENT CO.,LTD.
www.waigaoqiao.co
m.cn
90091
3
GX ENERGY
SHANXI GUOXIN ENERGY CORPORATION
LIMITED
-

10. China's Capital Market Structure
Multi-level Capital Market
Multi-level capital market is an important part of the capital market construction — to grow and
strengthen the main board, accelerate the development of SME board, steadily push forward the
construction of the ChiNext stock market, and actively explore the construction of OTC market.
Today, the multi-level capital market in China is taking shape.
Capital Market Participants (Investors, listed companies, agencies)
- Investors
Number of investors has increased year by year with ever-increasing scale of market
participation. As of the end of 2012, the number of stock investor's accounts reached 168
million, and fund investment account exceeded 40 million. The capital market has become an
important platform of wealth management for the investing public. In recent years, the investor
structure of China's capital market has been optimized. Securities investment funds, insurance
companies, social security funds, enterprise annuity, QFII and other types of institutional
investors have been active players in the market.

11. As of the end of 2012
Listed Companies
Over the past decade, the number of listed companies has doubled, and the total market
capitalization has increased by 4 times. At present, there are more than 2,000 companies listed on
the Shanghai Stock Exchange and the Shenzhen Stock Exchange. As of the end of 2012, the total
market capitalization of Shanghai and Shenzhen is about CNY 23 trillion.
As of December 31, 2012

12. The market value of the three stock exchanges in China by the end of 2012(Unit: CNY 100
million)
Source: Shanghai Stock Exchange, Shenzhen Stock Exchange, HKEx
Intermediary Agencies
In recent years, the intermediary industries have developed significantly. As of the end of 2012,
China's 112 securities companies have CNY 1.72 trillion of total assets, CNY 497.1 billion of net
capital, CNY 600.271 billion of customer transactions settlement funds balance, CNY 13.76
trillion of market value of securities in custody, and CNY 1.89 trillion of principal of fiduciary
management funds'. In 2012, securities companies had earned CNY 32.93 billion of net profit.

13. Net capital of securities companies 2007-2012 （Unit: CNY 100 million）
Marketplace
The Exchange provides the marketplace and facilities for securities trading. The marketplace
and facilities comprise the Exchange trading system, trading floor, Participant Business Unit,
order routing system and relevant communication systems. The Exchange has a trading floor.
The Exchange members (here in after referred to as members) shall input orders through their
traders dispatched to the trading floor. Unless specially permitted by the Exchange, only the
following persons are admitted to the trading floor: (1) registered traders; and (2) in-floor
supervisors.
Trading Participants and Trading Rights
In order to trade securities on the Exchange, members and the institutions 3 approved by the
Exchange shall apply to the Exchange for relevant seats and the right to trade so as to become the
Exchange trading participants. Trading participants shall conduct securities trading through the
Participant Business Unit for which they have applied to the Exchange. Participant Business Unit
refers to a basic unit that allows a trading participant to trade securities on the Exchange, to own
and exercise relevant trading rights and to be subject to the administration of the Exchange in
respect of relevant trading business. Detailed rules on the administration of Participant Business
Unit and relevant trading rights will be formulated by the Exchange separately and shall come
into effect upon the approval of the CSRC.

14. Trading Instruments
The following securities can be listed and traded on the Exchange:
(1) stocks;
(2) mutual funds;
(3) bonds;
(4) bond repos;
(5) warrants; and
(6) other instruments as approved by the CSRC.
Trading Hours
The Exchange is open for trading from Monday to Friday. The market is closed on public
holidays and other days as announced by the Exchange. In case of auction trading, the opening
call auction runs from 9:15 to 9:25 on each trading day, while the continuous auction runs from
9:30 to 11:30 and from 13:00 to 15:00, except for the securities whose trading is suspended and
resumed during trading hours. With the approval of the CSRC, the Exchange may adjust trading
hours in line with the market development.In case of temporary market closure for certain
reasons, trading hours will not be extended.
Legal Control
​The Trading Rules have been formulated in accordance with the Securities Law of the People’s
Republic of China and other laws, administrative regulations, rules of State departments and the
Constitution of china Stock Exchange in order to regulate securities trading activities, safeguard
the order in the securities market and protect the legitimate rights and interests of investors. The
Trading Rules are applicable to the trading of securities and derivatives (hereinafter collectively
referred to as securities) listed on china Stock Exchange (hereinafter referred to as the
Exchange). Any matter not specified in the Trading Rules shall be governed by other applicable
rules of the Exchange. The principle of openness, fairness and justice shall be followed in the
trading of securities. Trading of securities shall comply with laws, administrative regulations,
rules of State departments and the relevant rules of the Exchange and shall be based on the
principle of free will, compensation, honesty and good faith. Securities shall be traded on a
dematerialized and centralized basis or by such other means as China Securities Regulatory
Commission (hereinafter referred to as the CSRC) may app

15. Objective
1. ​To provide the information of a full range of investment products- including stocks, bonds,
mutual funds.
2. ​To provide investment advisory and financial planning information- including sales, research,
underwriting and trading for individuals and institutions.
3. To provide the information about market capital .
Methodology
To attain the above stated objectives, we collected information about ​china ​Stock Exchange
from internet. Basically our data is secondary data .
Sources
We mainly used secondary source of data to conduct this report. All information is collected
from the internet. We also took some help from different financial journals. We tried our level
best to collect and present the latest information about CSE.
Analysis Plan
At first we gathered at most information we can get about China Stock Exchange. Then we
selected the data that are of use for this report. We divided the whole report into three parts and
each of our group members was given a part to accomplish. After that we combined the three
parts together and made the final report.
Scope
As we had a secondary data source, our scope was limited into website based information. We
were fully depend on secondary data because physical interview was not possible.
Limitations
Mostly we relied on some websites containing information about china Stock Exchange. We
collected a large part of information of this report from different financial website . We could
not verify the validity of all information. Invalid information can be there. This limitation lessens
the possibilities of getting up to date information about our report topic.

16. Conclusion
China Stock Exchange is most important stock market in the world . We can not ignore its
importance in the economic part the world. In our report we try our level best to explain about
China Stock Exchange . The China Stock Exchange (CSE) is registered as a Public Limited
Company and its activities are regulated by China Securities Regulatory Commission (“CSRC”).
It also helps to do different kind of investing relationship: what really makes us different? This
market is going to upstair day by day . Local and foreign investor highly interest to invest in the
market .
Reference
https://www.thebalance.com/china-s-economic-growth-cause-pros-cons-future-3305478
https://tradingeconomics.com/china/gdp-growth-annual
http://english.sse.com.cn/investors/introduction/chinacapital/
http://english.sse.com.cn/listed/company/
http://english.sse.com.cn/laws/framework/c/3978489/
https://www.legalink.ch/xms/files/CROSS_BORDER_QUESTIONNAIRES/IPO/Legalink_
IPO_China
https://www.investopedia.com/terms/c/csrc.asp