Golden
STAR Market

STAR Market

China's technology focused board located in Shanghai, China. The Star Market attempts to be the Chinese version of the NASDAQ.

In November 2018, China's President Xi Jinping unveiled plans for a technology focused Chinese market called 'Star Market' during the opening ceremony of the International Import Expo. The Star Market was officially launched by the Shanghai Stock Exchange on July 22, 2019 with 25 listed technology stocks, and is set to have less strict trading regulations compared to other Chinese exchanges. China wants the Star Market to be the place where Chinese technology startups list their initial public offerings (IPOs), instead of listing their IPOs on exchanges located in Hong Kong or the United States.

Launch

The Star Market was created to sustain economic growth in China by shifting economic activity away from infrastructure spending and towards technological innovation. Yu Peihua, chief executive of AXA SPDB Investment Managers, shared his thoughts with reporters about why the Star Market exists by saying: 

The launch of the new board is a fresh sign China has shifted its focus from quantity and pace to quality in driving economic growth. China is highlighting the role of the capital market in bolstering technology companies, and encouraging them to conduct technological innovation.

In March 2019 companies began applying to be listed on the Star Market for its launch. A total of 149 Chinese firms applied, and 28 gained approval have their IPOs take place during the launch of Star Market. During the first day of trading on the Star Market, 25 out of the 28 approved technology firms listed their IPOS on the exchange. The firms gained an average of 140% and raised a combined $5.4 billion (37 billion Yuan) from their IPOs. During the first few hours of trading 8 technology companies were suspended for ten minutes from participating in the exchange because their stock prices rose over 30% from their opening prices. The highest performing stock on the Star Markets debut day was a company making materials for semiconductors called Anji Microelectronics, who saw their stock price increase up to 520% before closing the day at a 400% gain. In contrast, the poorest performing technology company during the debut of the Star market made a gain of 84% for the day.



The Chinese market data provider WInd, released information detailing how the 25 listed technology companies on the Star Market were on average worth 120 times more than their earnings by the end of their first day trading. Official data from the Star Market showed that short-selling transactions accounted for approximately 67% of margin buying during its first trading day. Ronald Wan, the chief executive of Partners Capital in Hong Kong, made the following comments about the gains made by Chinese technology companies during their debut on Star Market by saying "The [surge] is crazy, but it's already over done. I don't think such gains can last long. It's way too speculative".

Regulations

The Star Market is subject to different regulations compared to the Shanghai and Shenzhen exchanges. During the launch of IPOs on Star Market companies are exempt from first day gains limits placed on IPOs debuting on the Shanghai and Shenzhen exchanges. During a companies IPO all trades are halted for ten minutes if the company experiences gains reaching 30% above or below its opening price, and halted again for 10 minutes if the company reaches a 60% gain or loss. After a companies first 5 trading days their daily price is capped at 20% for both gains and losses. Companies that are unprofitable and/or have unequal voting rights are allows to participate in the Star Market, but are barred from participating in all other Chinese exchanges.

Timeline

People

Name
Role
LinkedIn







Further reading

Title
Author
Link
Type
Date

China kicks off new Shanghai tech board as it tests new ways to improve volatile stock market

Evelyn Cheng

Web

July 22, 2019

China launches Nasdaq-style tech stock exchange 'Star Market'

Jack Derwin, Business Insider Australia

Web

July 22, 2019

China's answer to the Nasdaq just had a crazy first day. Stocks gained 140%

Laura He, CNN Business

Web

July 22, 2019

China's tech-focused Star Market not in Nasdaq league -- yet

Mercedes Ruehl

Web

July 26, 2019

Every new stock surges in dream start for China's tech board

Daniel Ren

Web

July 22, 2019

Fund managers make fast exits in China's new STAR Market, retail investors pile in

Luoyan Liu, Andrew Gallbraith

Web

July 25, 2019

Shares Soar on First Day of Trading for China's Nasdaq Rival

AMY GUNIA / HONG KONG

Web

July 22, 2019

Documentaries, videos and podcasts

Title
Date
Link

China's Star Market rockets on launch

July 23, 2019

Chinese Deal-Maker Fan Bao on Launch of Mainland China's Answer to Nasdaq

July 22, 2019

Chinese shares soar in trading debut of Nasdaq-style Star Market

July 22, 2019

LIVE: China's Nasdaq-style tech board starts trading

July 21, 2019

Companies

Company
CEO
Location
Products/Services









References