Skyrocketing STAR board drags down broader China, Hong Kong stocks
- Anji Microelectronics Technology leads gains, shooting up 400 per cent
- Analyst Alan Li says most stocks on Nasdaq-style board are ‘definitely overvalued’
Extraordinary gains by the debutantes of Shanghai’s new technology innovation board dragged down the broader China and Hong Kong markets on Monday, as frenetic investors withdrew from the main boards to pile into the Nasdaq-style bourse.
The 25 stocks that debuted on the first day of trading in the board, also known as the STAR board, recorded gains between 84 per cent and 400 per cent from their initial offering prices. The new board is part of China’s efforts to encourage more funding and support for its homegrown technology companies amid increasing rivalry with the US.
Turnover of the 25 stocks topped 48.5 billion yuan (US$7 billion), making up one ninth of the overall transaction in China’s A shares. Manufacturer of semiconductor materials Anji Microelectronics Technology led the gains with a 400 per cent gain to 196.01 yuan from the offering price of 39.19 yuan, after rising by as much as 521 per cent during the day.
The Shanghai Composite Index slid 1.3 per cent to 2,886.97, and the Shenzhen Component Index was down 1.2 per cent. The ChiNext Index of start-ups listed in Shenzhen declined 1.7 per cent.
The Hang Seng Index dropped 1.4 per cent to 28,371.26.