Stock Market from 950 to 980 Stock Markets in China since 980 In 1952, Tianjin Stock Exchange was merged to Early Stage Tianjin Investment company. 980-1990, experimental period Beijing Stock Exchange was closed From 1950s to 1970s, only the gove could issue bonds, which paid interest but were not tradable Stock market"disappeared" in Chin Third Stage 1999-2008, development under regulation Fourth Stage 2009-present, more rational market after the Early Stage: 1980-1990 Early Stage: 1980-1990 Earliest Stocks Issued issue stocks in early 1980s Shanghai raised equity capital of 5 issued at the face value with ssued stocks with Shenzhen secur Byl990, there otally 8 stocks traded in No underwriter involved: limited secondary market Example: On July 25th 1984, Beijing Tianqi hmag89m助R hares at raised capital of 3 million RMB. In Dec. 1984. Feile Acoustics in Shanghai m issued 10,000 shares at RMB 50 to the public. Early Stage: 1980-1990 Early Stage: 1980-1990 86. stocks of Feile Acoustics and Shenzhen Security Company was established based ns in September 1987 with the from PB Byl990, there were 5 stocks traded in Shenzhen with rading(September 26th, 1984)for Feile and Yanzhong in ICBC ing3 5-13 Stock Market from 1950 to 1980 — In 1952, Tianjin Stock Exchange was merged to Tianjin Investment company. — Beijing Stock Exchange was closed. — From 1950s to 1970s, only the government could issue bonds, which paid interest but were not tradable. — Stock market “disappeared” in China. 5-14 Stock Markets in China since1980 — Early Stage ◦ 1980~1990, experimental period — Second Stage ◦ 1991~1998, rapid development without regulation — Third Stage ◦ 1999~2008, development under regulation — Fourth Stage ◦ 2009-present, more rational market after the global financial crisis Early Stage: 1980~1990 — Earliest Stocks Issued ◦ Some small-size SOEs and collective firms began to issue stocks in early 1980s ◦ The shares were issued at the face value with promised dividends and maturity to the employees and local residents ◦ No underwriter involved; limited secondary market ◦ Example:On July 25th 1984,BeijingTianqiao Company first publicly issued shares at RMB 100 and raised capital of 3 million RMB. ◦ Example: In Dec. 1984, FeileAcoustics in Shanghai issued 10,000 shares at RMB 50 to the public. 5-15 5-16 Early Stage: 1980~1990 — Earliest Stocks Issued ◦ In January 1985, Yanzhong Industrial Company in Shanghai raised equity capital of 5 millionYuan. ◦ OnApril 11th 1988, Shenzhen Bank of Development issued stocks with Shenzhen Security Company ◦ By1990,there were totally 8 stocks traded in Shanghai Equity Financing 1980-1990 in China (in Bln RMB) 1980-1987 1988 1989 1990 Total 1 2.5 0.66 0.43 4.59 5-17 Early Stage: 1980~1990 — Stock Trading and Security Companies ◦ From Sept.26th 1986,stocks of FeileAcoustics and Yanzhong became traded (OTC) in ICBC Jingan Security Department. ◦ Shenzhen Security Company was established based on 12 financial institutions in September1987 with the approval from PBC ◦ In 1988,three security firms were established in Shanghai. ◦ By1990,there were 5 stocks traded in Shenzhen with 12 security companies. ◦ The OTC market for stock trading had been established. . 5-18 Early Stage: 1980~1990 The first day ofTrading (September 26th,1984) for Feile andYanzhong in ICBC Jingan Security Department