Fundraising via China’s over-the-counter equity exchange has increased 10-fold this year, as the platform emerges as an increasingly viable financing channel for companies that might otherwise wait years to list on the main stock exchanges.
The number of companies traded on the National Equities Exchange and Quotations has risen from about 350 at the start of the year to 1,271. Fundraising totalled Rmb11bn ($1.8bn) as of late October, up from less than Rmb1.1bn in full-year 2013.
China’s leaders have pledged to increase the role of capital markets to reduce reliance on large state-owned banks, which often shy away from lending to smaller companies. Increasing equity finance could also slow the worrying build-up of Chinese corporate debt since the financial crisis.