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Early Stage Technology Stocks in China Nearing Bull Market Status


Nov 20, 2023

Shares of China’s small and medium-sized companies are defying the broader slump in local equities and are poised to enter a bull market. The Beijing Stock Exchange 50 Index, which is a gauge of early-stage innovative companies listed in the capital, rose 3.1% on Monday, taking gains from an October low to over 19%. This measure has outperformed its larger, tech-heavy peer by 12 percentage points and the benchmark CSI 300 Index by 16 percentage points, making it a bright spot in China this quarter.

The strong rebound on the Beijing board this month is partly due to a wider fluctuation range of 30% allowed for its constituents in either direction, compared to a span of as much as 20% for the Shanghai and Shenzhen gauges. Investors’ light positioning in these companies and regulators’ consideration to include eligible securities into the CSI cross-market index system also serve as catalysts for the positive performance of the Beijing Stock Exchange.

The Beijing exchange, launched two years ago, was aimed at helping small firms raise funds and making the nation’s financial markets more multifaceted. The largest of around a dozen exchange-traded funds tracking the index have assets of about 228.8 million yuan ($31.9 million).

By Editor

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