China mulls facelift to stock board that fosters massive new wealth at Shenzhen Mindray, Amperex Technology

President Xi endorsed measures to reform the ChiNext board by applying the registration system for IPOs and easing trading restrictions

The reform is modelled after the Star Market in Shanghai in a test to upgrade China’s three-decade-old stock market to international practices

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A statue of a bull is displayed outside the Shenzhen Stock Exchange. The ChiNext board on the exchange is home to medical ventilator maker Shenzhen Mindray Bio-Medical. Photo: Reuters

Published: 5:08pm, 28 Apr 2020Updated: 11:08pm, 28 Apr 2020

China is taking another step to nurture the ChiNext board in the southern technology hub of Shenzhen, which fosters one of the world’s most valuable medical ventilator manufacturers during the coronavirus pandemic.

The government on Monday unveiled measures to turn the board into its second Nasdaq-styled exchange by introducing new rules for stock offerings by fledgling companies, after recent efforts to launch the so-called Star Market in Shanghai last year.

The plan for share sales under a new registration system was endorsed on Monday by a team led by President Xi Jinping, while the Shenzhen Stock Exchange simultaneously unveiled specific measures to woo more hi-tech companies to the venue.

The measures include easier listing requirements, shortening the listing review process and widening the band for single-day stock price fluctuations, according to a statement on its website. The exchange is seeking public comments on the move through May 11.

“The ChiNext trial is a very important starting point to the registration reform of the existing market,” said Qin Peijing, a strategist at Citic Securities, the nation’s biggest publicly traded brokerage. “It will boost the risk appetite in the long run.”

ChiNext has hosted 807 companies since its inception in 2009, with a combined market capitalisation of 6.8 trillion yuan (US$960 billion). The pandemic has made Shenzhen Mindray Bio-Medical Electronics the most valuable member, after nearly a 50 per cent price surge this year. Lithium battery maker Contemporary Amperex Technology has rallied about 40 per cent this year.