The Growth Enterprise Market Comparative Analysis Between American And China

The growth enterprise market (GEM) began to operate on October23,2009, which is the symbol of the huge process of our county’s multi-level capital market.The establishment of the growth enterprise market has brought new investing and financing opportunities to investors and high-tech enterprise.There are75GERs setting up in home and aboard, but the number of closing markets reached to34and14markets developed slowly. The success markets are more the failed. NASDAQ、AIM、TSX-V、KOSDAQ、JASDAQ、HERCULES and Taiwan OTC of china are developing better, which play the incentive mechanism of innovation and evolution mechanism of the enterprise. The NASDAQ is certainly the best from this perspective. Imperfect social base and mismatching market operation mechanism are the basic reasons for its failure.GRE’S performance is disappointing since its operating three years ago. The index is rising for two months and the bubble is becoming bigger and bigger. There were28companies being listed and their average stock price rose by106.23%.Static p/e ratio is more than110and the dynamic price-earnings ratio is about80. The index is rising for two months and began to fall, but GEM index falls continually to the585.44points, which is the lowest degree. It falls more than50%comparing with the highest points1239.60points in December2010. At the same time the NASDAQ stock market index is up all the way from2649.56points to2982.03points although American economic situation is worse than China. Its performance is better than China. Investors are lack of rational Analysis and invest excessively. China’s growth enterprise market began to operate at wrong time and defective and imperfect system construction is the underlying reason which leads to GEM’s poor performance. As to research method, this paper mainly used comparative analysis and Historical research method. This paper consists of five parts to analyze GEM differences between America and China. I want to put forward reasonable Suggestions for our country’s GEM by comparing differences. Part1:background and significance of topic. Comparing three years market performance between America and china to analyze deficiency. Part2:Analysis of NASDAQ. Reviewed the establishment background and development of NASDAQ and analyzed the characteristics of its market indicators. Part3:Analysis current situation of Chinese GEM. Reviewed the process of the growth enterprise market set up in China and the market characteristic indexes (annual listed number, PE ratio, under-pricing rate, enterprise operating time before IPO) and carried on the statistical analysis. Part4: Comparative analysis between American and Chinese GEM characteristic. I find that Chinese market is similar to NASDAQ National Market and there are big differences comparing with the Small Capital Market, but the small capital market is a platform for small and high-tech enterprise to finance. By comparing background of foundation, listing standards, operating time, science and technology content of the listed company, found that Chinese growth enterprise market is a mature market and it can’t satisfy small and high-tech enterprise’s financing demand. Part5:conclusion and policy suggestions. Firstly, Promote innovation and encourage the development of venture investment. Secondly, lower listing standard and let more small enterprise meet the standard to finance. Thirdly, Introducing market makers and make up the defects of lowering listing standards. Finally, introduce rotating plate mechanism and improve the efficiency of resource use.