One year on, China’s vision for own Nasdaq-style technology board draws praises and disdain
- Euphoria has waned on the Star Market as some stocks dipped below their IPO levels and investors flee from expensive valuations
- Trade war, slowing economy and race for technology supremacy have cast a shadow over China’s latest push in capitalist market reforms
The meteoric rise and recent stumble of China’s budding technology board in Shanghai has captivated investors since its beginning one year ago, minting billionaires and burning investors in its infancy.
At the centre of the spectacle is the Science and Technology Innovation Board, a stock exchange created under an edict by President Xi Jinping in November 2018. The Star Market, as the board is also called, aims to support fundraising for start-up high-technology companies and those in strategic emerging industries, in the mould of the 48-year old Nasdaq Stock Market.
The mainland’s vast army of investors, known for parlaying into any stock or investing theme with a presidential seal of approval, drove the first batch of companies to more than 200 per cent gain within two weeks of their debut on July 22. Valuations skyrocketed to levels even today’s behemoth Apple Inc and Tencent Holdings would be envious of.
The Star Market is now home to 56 of the nation’s future champions, whose technologies have the potential to replace their American counterparts in the cutthroat global marketplace, according to Zhou Qinye, a former deputy general manager of the Shanghai Stock Exchange.
Some 60 billion yuan (US$8.6 billion) has been raised from initial public offerings on the board since it went live in July. Another 61 are making a beeline for growth capital, according to official data.