Star Market technology board second only to Nasdaq, leads Hong Kong in terms of funds raised amid Chinese stock market euphoria
- The launch of the Star Market, a pet project of President Xi Jinping, a year ago marked the start of China’s stock market reforms
- Bourse operator has fast-tracked listings of chip makers, biotech firms on Star Market to show support, Atta Capital’s Li says
Fundraising on China’s Star Market in Shanghai has rocketed, taking the fledgling technology board into second place globally so far this year in terms of funds raised.
The exchange, also known as the Technology and Innovation Board, is just ahead of Hong Kong and trails only the Nasdaq, after market euphoria in China this month has sent stocks soaring.
The Star Market, the brainchild of President Xi Jinping that will celebrate its anniversary on July 22, saw proceeds raised from initial public offerings and secondary listings this year climb to US$14.1 billion through 66 deals, Refinitiv data shows.
That puts it behind only the Nasdaq stock exchange in New York, where US$18 billion has been raised through 60 deals. In Hong Kong, 67 companies have raised a combined US$13.8 billion on the main board so far, according to the data.
“The recent rally in China’s stock market lifted investors’ sentiment, while the Star Market also drew some listings away from the main board,” said Alan Li, portfolio manager at Atta Capital. “The listing requirements are much looser, and the process is also quicker.”
The launch of the Star Market represented the start of China’s long-anticipated stock market reforms. It adopted a registration-based IPO system, a more market-driven approach that expanded to the ChiNext board of start-ups in Shenzhen recently. It also allowed loss-making companies to be listed.
Booming fundraising activities on the Star Market contributed to a trading frenzy that has dominated the onshore A-share market over the past two weeks, pushing the Shanghai Composite Index up 13 per cent since the start of this month.