BEIJING (AP) — A stock exchange set up in the Chinese capital to serve entrepreneurs opened trading Monday with 81 companies amid a crackdown on tech giants that has wiped more than $1 trillion off their market value abroad.
The Beijing Stock Exchange joins other mainland Chinese exchanges in Shanghai and the southern city of Shenzhen. They are mostly off-limits to foreign investors, but some companies have shares traded in Hong Kong, a separate Chinese territory that is open to global capital.
The ruling Communist Party has promised more support for entrepreneurs who generate wealth and jobs but is tightening control over tech companies. They are under pressure to invest their own money in Beijing's industry plans.
President Xi Jinping said in September the Beijing exchange would “create a service-innovation-oriented main position for small and medium-size enterprises,” the ruling party's term for private companies.
Chinese stock exchanges were set up to raise money for state-owned companies, which prompted entrepreneurs to go abroad for capital.
Investors are uneasy about the status of China’s entrepreneurs after the ruling party tightened control on tech companies by launching data-security and other crackdowns last year. Investors have knocked more than $1 trillion off the value of Tencent Holding and other tech giants on Wall Street and the Hong Kong exchange.
The Beijing exchange will accept smaller companies and wider price swings than Shanghai or Shenzhen, according to official media.
After their first day, prices will be allowed to fluctuate by a daily limit of 30% before trading is suspended. The Shanghai and Shenzhen exchanges are 10% one way or the other for the main bourse and 20% for their high-tech and small company boards.
On Monday, a maker of industrial parts, Henan Tongxin Transmission Co., soared by just over 500% in its market debut. Most other companies, many of which moved from other exchanges, rose or fell by single digit margins.
The Beijing Stock Exchange has yet to announce an index to track the overall market's movement. The name is a potential challenge: BSE already is used for India's main exchange and indexes.
Shenzhen added a separate trading board in 2004 for private enterprises. Shanghai added a board for technology companies in 2019.