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| Tianjin seeks to be site of first OTC market |
SHANGHAI, June 8 -- CHINA'S northern city of Tianjin has applied to set up the country's first national over-the-counter stock exchange as part of the city's plan to bolster its financial strength, a vice mayor has said.
The municipality has drafted detailed proposals on the OTC market and submitted an application to the National Development & Reform Commission in March for approval, Cui Jindu, Tianjin's vice mayor told reporters at an economic forum on Wednesday.
The OTC bourse, which is only available to institutional investors, will introduce a market-making system to boost liquidity, according to Cui. Market makers refer to institutions which quote prices and buy shares when turnover is low.
China's mainland has two main stock exchanges in Shanghai and Shenzhen as well as a small and medium-size enterprise board in Shenzhen in Guangdong Province.
There is also an OTC trading system for Beijing-based technology firms.
Earlier media reports said that several cities including Beijing, Shanghai and Shenzhen wanted to set up OTC markets. Analysts, however, noted the central government may allow Tianjin to set up the OTC bourse to help the city develop into another financial hub in addition to Shanghai.
Financial center
The central government in June 2006 had unveiled a plan to transform Tianjin into a financial center in northern China by reforming the city's Binhai New Area.
Experimental reforms are being carried out in the banking business, ways of raising funds and conduct of foreign exchange.
Industry sources said earlier that setting up the Tianjin bourse will basically meet the government's goal to create a multi-tier equity market. Big cap firms will list in Shanghai, medium ones in Shenzhen and start-up companies may trade on the Tianjin OTC market, they said.
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