The bull sculpture and flags in front of the Building of Shenzhen Stock Exchange. Photo: iStock

The Shenzhen Stock Exchange is seeking to support more high-tech firms in hopes they will enter the capital market through mergers and acquisitions, said Li Hui, deputy manager of the SZSE, reported.

Li thinks making full use of the capital market is the key to promoting the high-tech industry. The latter has characteristics of high growth and high risk, so it is difficult to meet the development needs through self-accumulation and indirect financing.

However, the capital market’s long-established risk and benefit sharing mechanisms highly matches their current financing demands.

Thus, the SZSE plans to increase the proportion of direct financing through multiple channels, so as to build up high-tech firms’ capital strength via IPOs and refinancing.

It will also guide a group of high-tech enterprises with strong innovation abilities and broad development prospects which are in line with national development strategies to eventually land on the capital market through M&As and restructuring.