The overwhelming fortune in A-shares has overflowed to the Beijing Stock Exchange.

Author | Huang Yida

Editor | Zhang Fan

Cover Source | Visual China

Since April 2025, the A-share market has embarked on a continuous upward trend. As of September 30th, over a period of exactly six months, the Shanghai Composite Index has risen by 25%. Judging from the increase and rhythm, it can be said that the current A-share market is in a bull market. One of the mainstream views explaining the current market is that the core driving force behind this year's A-share bull market is liquidity, namely the so - called 'liquidity-driven bull market'.

Chart: The trend of the Shanghai Composite Index since the beginning of this year; Source: Wind, 36Kr

While the A-share market has been booming, the Beijing Stock Exchange (BSE) has also performed remarkably well this year. The BSE 50 Index rebounded from after the Spring Festival to mid-March, basically filling the decline gap in November and December last year. After entering April, following the A-share market, it started a new round of continuous upward trend. Although there was a period of continuous adjustment in the middle, the accumulated increase from the two rounds of rise was quite substantial. As of September 30th, the BSE 50 Index has risen by as much as 47% since the beginning of the year.

Chart: The trend of the BSE 50 Index since the beginning of this year; Source: Wind, 36Kr

The B-share market, which used to be even more inactive than the BSE, has also had several rounds of band market this year. In particular, the Guozheng B Index has shown a continuous upward trend since the middle and late June this year, with the maximum increase exceeding 10% by mid-September.

So, why has the BSE, which was lackluster in previous years, seen a booming market this year?

01 Liquidity Drives Active Trading on the BSE

Looking at the market performance of the BSE since this year, the rebound of the BSE 50 from after the Spring Festival to mid-March was mainly driven by the fermentation of the DeepSeek concept, which led to a revaluation of the value of technology stocks. In the stronger rebound that started in mid-April, sectors such as semiconductors, humanoid robots, new consumption, innovative drugs, mergers and acquisitions, and reorganizations were active, and the main market trends rotated rapidly among these active sectors.

It can be seen that the market rhythm and corresponding popular themes of the BSE this year basically coincide with those of the A-share market. While the A-share bull market benefits from relatively loose liquidity, the trading activity of the BSE has also significantly increased this year.

Reflected in the data, the daily trading volume of the BSE has exceeded 20 billion for most of the time this year, reaching a peak of 52.8 billion. Although it has not exceeded the high of 92.4 billion last year, it has improved significantly compared with previous years. In terms of turnover rate, the average daily turnover rate of the BSE this year is 9.9%, higher than that of the A-share main board and the two innovation boards.

Chart: The daily trading volume of the BSE; Source: Wind, 36Kr

While the relatively improved liquidity has driven the A-share market to have a 'liquidity-driven bull market', the long - standing problem of insufficient liquidity on the BSE has also been significantly improved. Based on the credit stratification of China's liquidity, the Shanghai and Shenzhen stock markets in the equity market usually benefit first, and then the liquidity overflows to non - mainstream markets such as the BSE and the New Third Board. Driven by the profit - making effect, this is one of the main reasons for the significant increase in the activity of the BSE this year.

In addition, the BSE is mainly composed of small - cap stocks, and the stock prices themselves have higher elasticity than those on the main board. Moreover, the daily price limit for stocks on the BSE (excluding new stocks) is 30%, providing more room for capital games. Therefore, the combination of small - and medium - cap stocks and a more flexible trading system is also a core factor in the increase in the trading activity of the BSE this year.

Reflected in the index increase and decrease, as of September 30th, the increase of the BSE 50 this year has outperformed the main - board indexes with a small - and medium - cap positioning, such as the CSI 2000 and the Guozheng 2000. However, it is worth noting that the BSE 50 has underperformed the ChiNext Index and the STAR 50 Index during the same period, mainly because its higher volatility also has a negative impact on returns.

Chart: The increase and decrease of the BSE 50 and related stock indexes since the beginning of this year; Source: Wind, 36Kr

In recent years, the quality of new stocks on the BSE has significantly improved, and currently, there is an ample reserve of IPOs, which further enhances its attractiveness to investors. Moreover, with the start of using the new '920' code, the distinction between the BSE and the New Third Board in terms of trading identifiers and market positioning will be more obvious, helping investors to more clearly identify the targets in different market tiers, which is more conducive to enhancing the independent recognition and exclusive positioning of the BSE in the multi - tiered capital market.

In the long run, by encouraging the entry of medium - and long - term capital, the trading activity of the BSE is expected to further increase. In recent years, encouraging the entry of medium - and long - term capital into the market has been a hot topic in the capital market. For the BSE, the main focus is to guide private equity funds, government - guided funds, industrial funds, etc. to strengthen their investment in specialized and innovative small and medium - sized enterprises, and to encourage social capital to 'invest early, invest in small - scale enterprises, and invest in innovation'. As long - term capital, public funds have also participated. The BSE 50 Index Funds have significantly expanded in recent years, which is also an example of the increasing attractiveness of the BSE.

02 Both Theme - Driven and Fundamental - Oriented

In the investment direction of the BSE, the short - term theme - driven trend is very obvious, especially this year, with multiple hot themes rotating rapidly. Compared with the main board, there are similarities, but its own characteristics are also particularly prominent. In the first quarter of this year, the trading mainlines of the BSE highly coincided with those of the main board, and concepts related to AI and humanoid robots were actively traded.

Among the top - ranked stocks during the same period, Xin Ganjiang and Zhisheng Information are typical AI application concept stocks; Huayuan Co., Ltd., Lifang Holdings, Kunkong Technology, Kelite, and Parallel Technology belong to the computing power infrastructure; Wanda Bearing, Haomiao Technology, Chunguang Intelligent, Mingyang Technology, and Tonghui Electronics are all popular stocks in the humanoid robot field; Changfu Co., Ltd. was affected by the controlled fusion concept, and its upward trend continued until the second quarter of this year.

After entering the second quarter of this year, the trading mainlines of the BSE became more diversified, and the sector rotation also accelerated to some extent. From the perspective of theme switching, some of the funds that were allocated to technology stocks in the first quarter gradually shifted to new consumption. Consumer themes such as Jinbo Biology, Bawei Co., Ltd., Lusi Co., Ltd., Kangbiter, and Taihu Snow became significantly stronger. As the market evolved further, sectors such as military industry, aerospace, innovative drugs, and shipping became hot on the BSE, and most of the related stocks showed obvious increases during this period.

While trading hot themes, stocks with solid fundamentals also attract investors' attention. Looking at the overall performance of the BSE's mid - year reports this year: the revenue and profits of the automotive industry chain have shown strong growth momentum; while the profits of the consumer sector are generally under pressure, the revenue side has shown obvious improvement; the machinery and equipment industry is in a recovery trend, with improvements in both revenue and profit growth; the pharmaceutical industry has benefited from the favorable situation of BD going global this year and the marginal improvement in policies, jointly driving the overall performance growth of the industry.

Among the above - mentioned industry sectors with superior fundamentals, the performance of high - performing stocks is relatively stronger. For example, Yizhi Konjac in the consumer sector, as a typical representative of new consumption, has shown remarkable performance growth in the past two years due to the continuous strong demand in the konjac market, and its maximum increase since the beginning of the year has exceeded 300%. Another example is Kait Co., Ltd. in the automotive industry chain. Benefiting from the continuous growth of automobile sales, the demand for products such as sensors and actuators has been strong. The company's performance has grown quite strongly in the past two years. At the same time, it has entered the humanoid robot track. Under the investment logic of performance - driven combined with hot themes, Kait Co., Ltd. has seen a maximum increase of about 280% this year.

In terms of valuation, the PE - TTM of the BSE 50 Index has recently exceeded 70 times, corresponding to a historical percentile of about 95%. Although the current outlook is positive, which is expected to push up the valuation center of hot sectors, the safety margin has been significantly weakened compared with the previous period. Horizontally, although the current valuation level of the BSE 50 is far lower than that of the STAR 50, it has already significantly exceeded that of the ChiNext Index. The valuations of hot stocks have obvious premiums compared with those on the main board, and the valuation risks of the BSE at present cannot be ignored.

Chart: The valuation and historical percentile of the BSE 50 Index; Source: Wind, 36Kr

03 The B - Share Market Also Benefits from the Abundant Liquidity Environment

The previous situation of the B - share market was similar to that of the BSE, mainly restricted by the problem of insufficient liquidity, and the market trading had been very inactive for a long time. The short - term active trading and index increase of the B - share market this year are mainly driven by the short - term net inflow of funds, which in essence also benefits from the abundant liquidity environment of China's equity market.

Looking forward to the future, the potential long - term development opportunities for the B - share market include, first of all, the improvement of the transfer - listing mechanism, which provides more exit channels for investors; at the same time, simplifying the account - opening procedures can allow more investors to participate; and the long - term reasonable and abundant liquidity is conducive to improving the trading activity of the B - share market, providing investors with an additional choice.

*Disclaimer:

The content of this article only represents the author's views.

The market is risky, and investment should be made with caution. Under no circumstances do the information in this article or the opinions expressed constitute investment advice to anyone. Before making an investment decision, if necessary, investors must consult professionals and make decisions carefully. We have no intention of providing underwriting services or any services that require specific qualifications or licenses for the trading parties.