Shanghai Stock Exchange to debut Nasdaq-style market for tech stocks on July 22, three weeks ahead of schedule
- Twenty-five companies to start trading on the board the same day
- Debuting stock expected to draw a buying frenzy
Star Market, the Shanghai Stock Exchange’s highly anticipated Nasdaq-style technology board, will debut on July 22, three weeks ahead of schedule, the bourse said on Friday.
As of Thursday, 25 companies had received the go-ahead to start trading on the board, and they will also debut on the day, the bourse said. It added that it would make preparations to ensure a smooth start.
Star market was officially launched by the China Securities Regulatory Commission on June 13. At that point, Huang Hongyuan, the bourse’s chairman, had said a first batch of companies would start trading on the new market within two months.
The board was ordered into existence by Chinese President Xi Jinping in November last year, as a way of bolstering mainland China’s technology companies amid the US-China trade war. Star Market is aimed at creating a new fundraising platform for mainland Chinese companies operating in fields such as chip making and biotechnology.
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Moreover, these companies faced the prospect of having their supply chains strangled by US suppliers as the trade war escalated and evolved into a technology war in May 2019, prompting Beijing to step up preparations for the board’s launch.
Washington and Beijing have since agreed to a truce, during a meeting between Xi and his US counterpart, Donald Trump, in Osaka on June 29.
“Most investors believe these shares are good buys, with the government’s support and huge growth potential,” said He Yan, a hedge fund manager with Shanghai Shiva Investment. “But the regulators are wary of boom-and-bust cycles, as they have to make sure of a successful inauguration of the new market.”
The exchange will suspend trading for 10 minutes if a company's stock jumps or falls 30 per cent from its opening price. Another 10-minute suspension will be imposed if the rise or fall hits 60 per cent during intraday trading.
From the sixth trading day onwards, companies traded on the new board will be subject to a 20 per cent daily upside or downside limit.
Stocks in other mainland Chinese exchanges have a 10 per cent up or down daily limit, and there is a trading cap of 44 per cent in gains on the first day a stock trades.
