The frenzied trading on Shenzhen’s ChiNext technology board that propelled a debutant stock by nearly 3,000 per cent on Shenzhen’s technology board could jeopardise the sweeping reforms by the regulator to further deregulate and cut trading restrictions on China’s three-decade-old stock market. The revised trading rules that allow new shares to rise or fall without any cap on the first five days of trading on the ChiNext board came into effect on Monday. However, initial public offerings on the main boards of the Shanghai and Shenzhen’s exchanges are limited to a 44 per cent gain and a 36 per cent decline on the first day of trading in a move to rein in speculation. Contec Medical Systems, a Hebei-based medical equipment, jumped 2,932 per cent to an intraday high of 308 yuan from the offer price of 10.16 yuan on debut. At the close, the stock finished 1,061 per cent higher at 118 yuan, making it the best-performing debutant in the mainland since at least 2000. The ChiNext companies are valued at 81 times reported earnings, almost five times as expensive as the multiple of the Shanghai Composite Index dominated by bigger companies, Bloomberg data shows. “The ChiNext is expensive, and is no longer a price-discovery mechanism but a venue for speculation,” said Hong Hao, managing director with Bocom International Holding in Hong Kong. “Amid liquidity, speculation will unlikely dissipate soon. And falling stock prices, instead of rising, should be the sign of whether such a market reform is successful.” The other 17 companies that began trading alongside Contec Medical in the first batch of IPOs after the revamp all soared. Ningbo KBE Electrical Technology, which makes automotive cables, jumped 743 per cent to 158.45 yuan, making it the second-best performer after Contec Medical, while Beijing FengShangShiJi Culture Media recorded the smallest gain, rising 43 per cent at the close. “Some individual ChiNext stocks are a bit speculative in debuts and most are doing all right,” said Wu Kan, an investment manager at Soochow Securities in Shanghai. “But you will need to respect pricing by the market. As long as trading doesn’t run afoul of the rules, I don’t think that the regulator will intervene as before.” The 18 companies, which raised a combined 20 billion yuan (US$2.9 billion) from IPOs, achieved listings after being vetted under the new registration-based system, in which regulators approve the decision based on the quality of disclosures instead of companies’ growth outlook. Xiaomi’s spectacular gain outshines Alibaba and Wuxi Biologics in first week since trio tapped for Hang Seng Index Besides, the regulator has doubled the daily trading band of ChiNext stocks to 20 per cent. The move is “very vital to improve the basic systems of the capital market and of great significance in serving high-quality economic growth,” said Yi Huiman, chairman of the China Securities Regulatory Commission (CSRC) said in a listing ceremony marking the reforms on the ChiNext board in Shenzhen on Monday. China has been ratcheting up support of its local hi-tech companies by revamping listing and stock trading rules at a time when the US is threatening to cut off technology exports amid dialled-up tensions between the world’s two largest economies. A year ago, the Shanghai Stock Exchange launched a similar technology board , which currently hosts 159 companies including chip maker Semiconductor Manufacturing International Corp . “The kick-start of the registration-based system will increase the number of listings on the ChiNext board,” said Zheng Yuchen, chief investment officer at HSBC Jintrust Fund Management in Shanghai. “There will be bigger price swings after the daily trading cap is relaxed.” The ChiNext index, which tracks the board’s 100 biggest companies, jumped 2 per cent on Monday, capping the biggest gain in three weeks. It has advanced 49 per cent this year, the best performer among the gauges of Chinese onshore stocks, as unparalleled liquidity released by the central bank bolsters valuation. Besides the 18 debutants, 13 companies rose by more than 10 per cent on Monday, with four of them hitting the 20 per cent daily cap, while only one fell by over 10 per cent. The ChiNext board, which has more than 800 listings worth a combined US$1.3 trillion in market capitalisation, started operation in 2009. It led a crash that erased US$5 trillion in value in the broader market in 2015 after the regulator deflated the bubble fuelled by leveraged buying.