The Beijing Stock Exchange 50 Index, which tracks early-stage innovative companies listed in the capital, has shown signs of a bull market despite a broader downturn in local equities. On Monday, the index rose by 3.1%, marking an impressive gain of over 19% since October. This outperformance is noteworthy as it has surpassed its larger, tech-heavy peer by 12 percentage points and the benchmark CSI 300 Index by 16 percentage points, making it a bright spot in China this quarter.
The strong rebound on the Beijing board can be attributed to several factors. Firstly, the wider fluctuation range of 30% allowed for its constituents in either direction compared to a span of as much as 20% for the Shanghai and Shenzhen gauges. Additionally, investors’ light positioning in these companies and regulators’ consideration to include eligible securities into the CSI cross-market index system are also seen as catalysts for this growth.
Launched two years ago, the Beijing exchange was designed to help small firms raise funds and make China’s financial markets more diverse. Despite moderate investment compared to other options, with largest of around a dozen exchange-traded funds tracking the index having assets of about 228.8 million yuan ($31.9 million), the Beijing exchange is proving to be an attractive investment option for those looking for high returns in China’s financial markets.