China capital markets under spotlight

The Shanghai Stock Exchange (SSE) is leading growth in the Asia-Pacific region, according to the new Asia Pacific Capital Markets Guide, produced by Grant Thornton International.

The average total market capitalisation of the SSE is up nearly five fold from 2006 to 2007. The total market capitalisation value of US$2.1 trillion is now almost half that of the Tokyo Stock Exchange ($4.6 trillion), which grew by less than one per cent in the same time period.



The Indian capital markets are also enjoying unprecedented growth. The Bombay Stock Exchange (BSE) and National Stock Exchange of India both enjoyed 73 per cent growth in terms of average market capitalisation. The BSE is now catching up with the Australian Securities Exchange with a total market capitalisation of $1.2 trillion and $1.3 trillion respectively. As Harish HV of Grant Thornton India comments, "India is forecast to be the fastest growing IPO market in the first half of 2008 in the Asia-Pacific region."

Andrew Lam, of Grant Thornton Hong Kong says, "China’s gross domestic product (GDP), now the fourth largest in the world, has been growing at an average of around 10 per cent per annum over the last two decades and is at a record level of approximately US$3.25 trillion in 2007. This has boosted the comparatively new stock exchanges in Shanghai and Shenzhen. Market reforms in recent years have greatly enhanced their status as fund raising centres."

The Grant Thornton Asia Pacific Capital Markets Guide compares the performance of the 21 largest stock exchanges in the region between 2005 and 2007. China and India, the economic superpowers emerging from the Asia Pacific region, will shift the balance of world capital flows, both creating demand for capital and providing investment funds to satisfy it. As the economies and markets in the region have deregulated, the opportunities for entrepreneurs and established businesses have grown exponentially.

This guide is part of a series of capital markets guides that Grant Thornton International has compiled over the last seven years. These guides track the emergence and development of some of these alignments. This and other Grant Thornton capital markets guides can be accessed on the publications section of www.gti.org .

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