'Outstanding' capital market still expanding

Companies in Qingdao, Shandong province, raised nearly 22 billion yuan ($3.25 billion) from national-level and regional capital markets in the first quarter of 2017, a record high for that quarter since 2010.

Hailir Pesticides and Chemicals Group, a chemical solutions provider, was Qingdao's first company to be listed in 2017. The company debuted on the Shanghai Stock Exchange on Jan 12, raising 740 million yuan in capital. Liqun Group, a local retailing giant and Weflo Valve Company, a leading designer and manufacturer of valves and associated pipeline products, were listed on the A-share market in the second quarter.

During the first quarter of 2017, eight companies were listed on the National Equities Exchange and Quotations, raising a total of 36 million yuan through the capital market, according to the local financial affairs office.

Qingdao had seen an increasing number of companies listed on the NEEQ, known as the New Third Board, over the past few years. A total of 112 companies had debuted on the NEEQ by the end of May.

China's securities regulators divided NEEQ-listed companies into two markets in 2016 - the innovation market and basic market - with the aim of better serving the needs of small and medium-sized companies. Strong innovation capability has become a key feature of Qingdao's NEEQ-listed companies. Thirteen of the 112 companies have been included in the innovation market of NEEQ.

Apart from seeking listed opportunities on the NEEQ, local companies are also keen to be listed on the regional equity market.

Qingdao Blue Ocean Equity Exchange, a regional equity trading market established in 2014, has recorded a growing number of listed companies over the past three years. By the end of May, the total number of listed companies reached 597, up from 569 last year. The local authorities said the market is playing a vital role in providing funding support for small and medium-sized companies.

Bonds are also an important means of raising funds for businesses in the city. Qingdao has approved the issuing of 40 types of bonds, which have helped companies raise 21.19 billion yuan over the past few years.

The Qingdao government released 19 policies to support the development of the regional financial industry in early 2017.

For instance, companies are encouraged to be listed on the regional equity exchange market. Non-listed companies that are successfully listed on the regional equity exchange market will receive 300,000 yuan in subsidies.

A capital market investment fund has been established to provide financial support to companies.

The total number of securities, fund and commodity trading institutions had increased to 268 by the end of March. Those companies managed some 331.17 billion yuan in wealth in Qingdao.

There are 106 private equity fund management companies in Qingdao, which is nearly one-third less the number in 2015. However, those companies are managing 93.92 billion yuan, up 4.59-fold from 2015. Meanwhile, private equity companies are offering 214 products, an increase of 168 percent on the number in 2015.

Five listed companies reported six mergers and acquisition deals in 2016. The M&A activities helped companies expand along industrial chains, diversify their product portfolios and seek more business opportunities on the global stage.

(China Daily 07/07/2017 page24)