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ChiNext extends run-up as China deepens reforms of IPO registration system and wider trading band
- ChiNext board entered a bull market last week after rising 20 per cent from its February low
- Approvals of new offering and trading restrictions are part of reforms for the index of smaller growth companies
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China’s ChiNext board of start-ups extended its bull market run after the securities regulator officially kicked off an overhaul that will streamline approvals of new offerings and loosen trading restrictions.
The ChiNext index, which tracks smaller growth companies, rose 1.8 per cent at the close in Tuesday trading in Shenzhen, extending its gain from a February low to 26 per cent. The gauge technically entered a bull market after rising 20 per cent from the nadir last week.
Adding fuel to the run-up was the official implementation of a raft of reform measures to spruce up the decade-old board designed for the listings of hi-tech companies, The Shenzhen Stock Exchange will review all applications for selling shares on the ChiNext from this week.
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It will assume the power from the securities regulator in approving those applications, by focusing more on information disclosures rather than growth potentials, the China Securities Regulatory Commission said in a statement on Friday.
The Shenzhen bourse also said in separate statements that it will widen the daily trading band, stiffen delisting requirements and allow listings of so-called red-chip companies, or Chinese firms that register overseas.
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