After years of struggling to shed its parochial image, the Shenzhen Stock Exchange appears to have made it big - at least judging by a string of upbeat market indicators. At its fourth general meeting last week, exchange officials and members rejoiced at its strong trading figures this year, which have put it on course to become a national exchange. Exchange president Zhuang Xinyi said at the meeting: 'After six years of operation, the Shenzhen stock market has ushered in a new era, bringing to an end the trial stage of its development.' He optimistically predicted the exchange would play an increasingly important role, with its greater recognition across the country. What was more, Shenzhen threw down the gauntlet to its bigger Shanghai rival: it wants to become China's top stock market. A longer-term plan - within 15 to 20 years - was mapped out to expand Shenzhen into one of the world's major securities markets. Shenzhen proposed an eight-pronged strategy to become a sophisticated exchange with a dynamic back-up service and risk management system. The meeting was in stark contrast to a few years ago when Shenzhen suffered an inferiority complex - eclipsed by the premier financial centres in Shanghai and Hong Kong in the run-up to next year's handover. 'In terms of investor profile, coverage of listed companies and members, the Shenzhen exchange has evolved into a national exchange,' CSSC International managing director Rocky Shao said. CSSC is the Hong Kong office of China Southern Securities. Shenzhen's wider representation has been reflected in its robust trading during the first eight months, hitting 468 billion yuan (about HK$435.24 billion) and accounting for 53.3 per cent of national turnover - the first time it has surpassed Shanghai in three years. With non-Shenzhen companies making up 70 per cent of its listed counters and nearly all the new listings coming this year, the exchange's role is no longer regional but national. Almost all mainland brokerage houses have representatives in Shenzhen, with members numbering 547 and serving a total 7.4 million mainland investors. Trading records have consistently been made this year. Record daily turnover of 11.2 billion yuan, set on September 2, was four times that of Shanghai and Hong Kong on that day. The monthly record of 158.7 billion yuan was set in July and was nearly a third more than Shanghai's and two-fifths more than Hong Kong's turnover for the same month. This was despite Shenzhen's relatively smaller capitalisation of 271.5 billion yuan - three-fifths Shanghai's and one-tenth Hong Kong's. The impressive figures are a result of continuous attempts by the Shenzhen municipal government and the exchange: transaction fees have been cut, market expansion sped up, management teams fortified, satellite data transmission increased and trading in B shares revived. The innovative changes, along with low-priced multiples, have led to a change of heart of mainland investors. Also giving Shenzhen a big boost has been Hong Kong's return to China, offering the exchange a chance to beef up its bid to internationalise operations and add ammunition to its attempt for a stronger foothold in China. The exchange has proposed primary and secondary cross-border listings, information exchange and computer links with the Hong Kong exchange, albeit preliminary. The projections may be a bit bullish to some, but the exchange's competence as a fund-raising venue is on the board. In the first eight months, a total of 62 companies - bringing the total number of listed companies to 181 - raised a combined 8.7 billion yuan in equity issues - a record figure since the exchange re-opened in July 1991. Despite that, analysts said the explosion on the Shenzhen exchange could fizzle later this year as higher multiples turned investors to cheaper stocks. J & A Securities analyst He Xiaomu said: 'Shenzhen's shares have been trading at a higher multiple than Shanghai's for about half a month, reflecting a gradual diminishing of investment value.' Shenzhen A shares are currently trading at a price-earnings ratio of about 27 times, against Shanghai's 25 times. The Shenzhen A-Share Index - which tracks 170 A-share companies - was up 143 per cent at the end of August - almost triple Shanghai's 52 per cent. The Shenzhen B-Share Index - which tracks 40 B-share companies - saw a 50 per cent rise, against Shanghai's 5.6 per cent. Mr He said funds could be channelled back into the comparatively cheaper Shanghai market, particularly into non-Shanghai companies which currently trade at a 25 per cent discount to Shanghai counters. 'When investors find the Shanghai stock market a more favourable market to play, they will go for it,' Mr Shao said. However, even if funds are conduited back to Shanghai, it is unlikely Shenzhen will suffer, given the greater recognition it now enjoys. In May, Shenzhen compiled an indicator of the 20 best-performing listed companies to promote the significance of their profitability and fundamentals. The benchmark is important because it officially recognises quality companies and provides investors a gauge to measure stocks. 'A trend has been established in Shenzhen for investors to pay attention to company earnings. It's something that can't be reversed,' Mr He said.