Kwai Haoming: Its not a bad thing for Nasdaq to adjust its listing rules

category:Finance
 Kwai Haoming: Its not a bad thing for Nasdaq to adjust its listing rules


This situation seems to be quite different from the Chinese stock market. For Shanghai and Shenzhen A shares, the higher the proportion of major shareholders, the more likely they are to be speculated. The reason why there is such a big difference should be said to be related to the different corporate culture and understanding of equity theory. In addition, the liquidity of American stock market is sufficient. In the operation of the market, large-scale stocks can often obtain liquidity premium, which is also a realistic factor.

It should be admitted that Nasdaqs adjustment of the Listing Rules of small companies has a great impact on Chinese enterprises. Since the large number of Chinese companies listed on Nasdaq in 2000, a considerable number of large Chinese companies have landed. Their good liquidity and increasing benefits have been welcomed by American investors. Some of them have been listed in the forefront of the Nasdaq market. However, it must be admitted that there are also many companies, which are small in size and mainly issue to relevant investors in China when they launch their IPOs. Even after the listing, most stocks are in the hands of a few insiders, which leads to inadequate liquidity. Once something happens, their volatility is high, which becomes a drag on the market. In the view of American investors, although this kind of enterprise belongs to the public company, it lacks the ownership structure to protect the characteristics of the public company. It is more like an insider-controlled enterprise, which is inconsistent with its equity theory. As a result, investors in the United States are naturally less involved, and stocks are marginalized because of lack of liquidity, making them unpopular on exchanges.

This situation seems to be incomprehensible to investors in China. After all, it is still difficult to IPO in the Shanghai and Shenzhen stock markets. The pattern of shortage of supply and demand determines that a small number of circulating shares change hands repeatedly after the IPO, and the stock price is also speculated. But if you look at the new third board, you can easily understand what is going on.

There are quite a number of Listed Companies in the current new third board. The shareholders are basically the actual controllers and their concerted actors. They have never sold stocks after listing. They are non-listed public companies in form, but in fact, there is little public participation. Such a company, of course, can not form an effective pricing in the market, nor will it be concerned by investors. The poor performance of the new third board is closely related to a large number of companies with unreasonable ownership structure and little liquidity. In the final analysis, this is also a problem of equity culture in theory, but it is more extreme.

Obviously, for the stock market, the stock ownership of listed companies is too concentrated and the poor liquidity is not a good phenomenon. Therefore, Nasdaq has revised the Listing Rules for small companies. One of them is to raise the minimum trading volume requirement for stocks per unit time and plan to raise the minimum number of stocks held by a certain number of companies. The aim is to force the diversion of stocks and improve liquidity. On the face of it, it does seem to pinpoint some small enterprises in China, but the real point is to improve the efficiency of market operation. From the perspective of conspiracy theory, some people think that this restricts the listing of Chinese enterprises. In fact, this policy is aimed at all listed companies, and the purpose is good faith. Furthermore, if Chinas stock market is to mature and integrate with the international market in an all-round way, it may also be necessary to make such institutional changes. After all, it is a matter for any stock market to make listed companies a real public company. (Author Unit: Shen Wanhongyuan Securities) Source of this article: Responsible Editor of Securities Times: Yang Qian_NF4425

Obviously, for the securities market, the stock rights of listed companies are too concentrated, and poor liquidity is not a good phenomenon. Therefore, Nasdaq has revised the Listing Rules for small companies. One of them is to raise the minimum trading volume requirement for stocks per unit time and plan to raise the minimum number of stocks held by a certain number of companies. The aim is to force the diversion of stocks and improve liquidity. On the face of it, it does seem to pinpoint some small enterprises in China, but the real point is to improve the efficiency of market operation. From the perspective of conspiracy theory, some people think that this restricts the listing of Chinese enterprises. In fact, this policy is aimed at all listed companies, and the purpose is good faith. Furthermore, if Chinas stock market is to mature and integrate with the international market in an all-round way, it may also be necessary to make such institutional changes. After all, it is a matter for any stock market to make listed companies a real public company.

(Author: Shen Wanhongyuan Securities)