Asia Times | China's new STAR market takes center
Trading has started a new Nasdaq style circuit board in China.
On Monday, the decision to roll out the Shanghai Stock Exchanges Sci-Tech Innovation Board, or STAR, represented one of the country's main market reforms and a potential weapon in its growing technology rivalry with the United States.
In early trading, the 25 stock market rose STAR after a massive oversubscription before the public debut.
Beijing is looking for the board to be mentioned in the same breath as a day as the benchmark index, the US Nasdaq, and encourages companies to list at home after Alibaba and Baidu like to plummet for Wall Street.
But the first effect is expected to be small. [1[ads1]9659002] I believe the science and technology board will evolve into a major and important sector of China's capital markets, but it will take a long time, maybe 10 years, 20 years or even longer, says Jiang Liangqing, a money manager at Ruisen Capital Management , so.
China hopes to draw listings from the nation's rich stable tech unicorns, or startup valued at at least $ 1 billion. These include Alibaba-linked mobile payments pioneer Ant Financial, ridding giant Didi Chuxing and online services platform Meituan-Dianping.
But none of them is among the first 25, which does not contain any household names. [19659009] Hope of Faith
The largest is China Railway Signal & Communication Corporation, which has gradually raised 10.5 billion yuan ($ 1.53 billion), most of some commodities.
There is a leap of faith for China's volatility-averse authorities
For the first time, Chinese companies can list without prior history or restrictions on IPOs or original public offerings.
There will be no restrictions on price movements for the first five days of trading, after which a daily 20% bond will be imposed.
China's main exchange is subject to a 10% band to contain volatility on the often-reputation-driven markets.
The technical board was announced in Novem asking for President Xi Jinping as a struggle with the United States for technological superiority heated.
Xi has called on China's technological titans to become global masters while the United States has fought partly through taking steps to cut the wings of Chinese telecom giant Huawei.
When major technology companies translate, the government in Beijing loses influence over its fundraising and capital controls, so that Chinese investors do not share in the success of these companies due to restrictions on the purchase of foreign shares.
China realized it was necessary to provide the basis for the market reform.
"If China did not launch this new technology board now, it would miss the opportunity to transform its economic development into this" new economy "model," said finance director Yang Delong. at the First Seafront Fund, said.
– AFP
