THE benchmark index of the Beijing Stock Exchange (BSE) opened up 2% on its debut yesterday as the year-old market tasked with fostering innovative small companies attempts to build liquidity and narrow the gap with larger exchanges in Shanghai and Shenzhen.

The publishing of the BSE 50 Index is part of a raft of measures designed to drum up investor interest, including plans to halve trading fees, allow margin financing and introduce market marking.

The first anniversary package is aimed at luring fresh capital and accelerating initial public offerings (IPOs) in a market launched to fund innovative small companies called “little giants” that specialize in niche sectors.

A liquidity shortage is the most pressing teething issue facing the Beijing exchange, which competes for capital with the bigger Shanghai and Shenzhen bourses.

Combined daily turnover of the 126 companies listed on the Beijing bourse is merely around 1 billion yuan (US$140.47 million), less than that of the single most actively-traded stock listed in Shanghai.

The rollout of the BSE 50 Index, which tracks the exchange’s biggest companies including Jilin Tangu Carbon Fiber Co. and BTR New Material Group, will provide “a tool to monitor overall performance,” general manager Sui Qiang said in comments on BSE’s website.

Several fund houses are in talks to develop investment products based on the index, which will improve market liquidity and investor structure, he added.                   (SD-Agencies)