(Yicai) Dec. 21 -- China International Capital Corporation received approval to become the 16th market maker for the Beijing Stock Exchange, with the leading global investment bank being the first approved in the second batch.

From today, CICC will provide market-making services for the bourse's top stock BTR New Material Group [BSE: 835185], which ended up 1.4 percent at CNY23.80 (USD3.33) a share, and Jilin Tangu Carbon Fiber [BSE: 836077], which closed 3.1 percent lower at CNY16.70, the Beijing-based firm said yesterday. It also gained access to the BSE for market-making transactions a day earlier, it added.

Established in September 2021, the BSE is the first stock exchange in the Chinese mainland to have a market-making system, and it is likely to attract more market makers in the future.

Market making refers to the practice of providing liquidity to financial markets by facilitating the buying and selling of financial instruments. Market makers are typically firms or individuals that stand ready to buy and sell a particular asset -- stocks, bonds, or other securities -- to ensure smooth and continuous market trading.

The BSE's other 15 market makers provided services for 79 stocks as of the start of last month, accounting for about one-third of the bourse’s total, said Hou Dinghai, director of BSE's trading operation department.

The exchange brought out a series of reform measures in September, such as lowering the access threshold, to attract more market makers. Since then, about 10 brokerages, including Haitong Securities and Guoyuan Securities, have completed testing.

Due to the anticipated improvement in market liquidity resulting from the expansion of the market-making team, the BSE has experienced a significant bullish trend. The Beijing Stock Exchange 50 Index [BSE: 899050], which comprises the bourse’s top 50 stocks by market value, dropped 6.9 percent today, but is up 31 percent since the start of last month.

New market makers for the BSE need to buy treasury stocks, bringing in incremental capital, Liu Jing, an analyst at Shenwan Hongyuan Securities, told Yicai. They can also improve market liquidity through two-way quotations, Liu noted.

Upgraded from the over-the-counter National Equities Exchange and Quotations, the BSE mainly caters to small and mid-sized companies, with 238 firms listed and trading on the bourse.

Editors: Dou Shicong, Martin Kadiev