China to Open Stock Market for Small Firms

Trading on China’s new stock market catering to smaller companies will begin Oct. 23, the chairman of the country’s securities regulator said Saturday.

The Growth Enterprises Market is meant to nurture private companies that struggle to get financing in a system favoring big state enterprises.

Shang Fulin said the first day of the new board will see an initial batch of 28 companies listed and available for trading, according to the official Xinhua News Agency.

The introduction of the new enterprise board, to be run by the Shenzhen Stock Exchange, is viewed as an important step in fostering growth of private, smaller companies that are increasingly crucial for job creation in an economy still dominated by bigger state-owned companies.

It will be located in Shenzhen, the southern financial center near Hong Kong that is the site of the smaller of China’s two stock exchanges.

Although the size of the share offerings is dwarfed by those of much bigger companies on the main boards in Shenzhen and Shanghai, the exchange offers Chinese punters a welcome new investment option. Foreign investors are still largely excluded from trading in Chinese currency-denominated shares.

10/17/2009 4:52 AM BEIJING (AP)