Investors hunt for gold ahead of debut of China’s Nasdaq-like technology board
- The first seven mutual funds approved to trade the Technology Innovation Board have raised a combined 100 billion yuan (US$14.86 billion)
Mainland investors are racing to buy mutual funds linked to Shanghai’s new Nasdaq-style technology board, in the expectation that these funds will have privileged access to upcoming IPOs, potentially enjoying handsome returns upon public trading.
As of Tuesday, the first batch of seven funds slated for the Technology Innovation Board were heavily oversubscribed by investors, raising a combined 100 billion yuan (US$14.86 billion), according to the statements by the asset management firms.
“Optimism about the trading outlook for the technology firms resulted in strong sales of the funds,” said Ivan Li, an asset manager with hedge fund Loyal Wealth Management. “Mainland investors have faith in IPO shares and they are convinced that the companies set to list on the new technology board will bring them handsome returns.”
Mainland mutual fund houses can issue new products to raise funds subject to the approval by the China Securities Regulatory Commission (CSRC).
The country’s largest fund management firms including China Asset Management and China Southern Asset Management were among the first institutions allowed to launch funds that focus on the new board.
Six of the first seven funds were at least 10 times oversubscribed while the fund launched by China Asset Management received 25 times more orders than it was able to fulfil.