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What is the Shenzhen Stock Exchange?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 15 August 2018
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The Shenzhen Stock Exchange (SHZ or SZSE) is one three primary stock exchanges in China. It is also one of the largest stock exchanges in Asia. Although its precise rank varies, depending on how its market capitalization is valued, it is most definitely among the top 10 largest Asian exchanges. Established in 1990, the Shenzhen Stock Exchange is based in Shenzhen, China and it partners with other financial companies in the area.

More than 1,200 companies were being traded on the Shenzhen Stock Exchange as of 2010. Many of these companies are controlled by the Chinese government and trade in their shares is limited, as the government does not sell, exchange, or trade its shares. Consequently, some economists believe that companies traded on the exchange may be overvalued, as there are few shares available and people are more competitive about acquiring them. This is an issue when determining the market capitalization of the exchange.

The exchange maintains a number of indexes. People can trade using these indexes, which list the top trading companies in various categories, and they can also be used as economic indicators by people studying the Chinese economy and making financial projections. One issue with the Chinese economy is concerns about government involvement; choosing to privatize companies would cause radical financial shifts and these cannot be predicted and controlled by economists.

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Electronic and floor trading are available for brokers, dealers, and individual investors who qualify to trade on the exchange. To be listed, companies must meet capitalization requirements and they can be delisted if they fall below the standards set by the exchange. A regulatory board oversees activities at the exchange, setting policies and making other decisions to shape the future direction of the exchange, as well as promoting robust and active trade in the present. The board must consider the interests of the Shenzhen Stock Exchange, the market, and other financial exchanges in China when making regulatory decisions.

The Shenzhen Stock Exchange has a website where the latest information about its activities is published, allowing traders all over the world to keep up with events at the exchange. People can also track it through other financial websites, financial news programs, and magazines dedicated to discussing Asian financial markets. Analysts who work in Asian markets can also be an excellent source of information through their public statements, written papers, and other communications. International companies may keep such analysts on staff to assist them with investing decisions and other business matters.

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