Today, an exchange for companies of the technology sector called Star Market has opened in Shanghai. Last year, China’s President Xi Jinping announced that an analogue of the American Nasdaq would be created in the country. He has kept his promise and engaged 25 companies to participate in a starting bid. For the first session, the securities of the debutant companies have increased an average of 140%.
Star Market is under the jurisdiction of the Shanghai Stock Exchange. According to the Financial Times, more than 140 companies have applied for listing on the new trading floors. They want to attract about 18.7 billion dollars. At the moment, 25 companies have been endorsed by the Exchange. These firms have managed to attract more than $ 5 billion due to the IPO.
Other exchanges set limits on the growth of quotations. For example, the Shanghai Stock Exchange limits the growth of stock prices at the first session. It amounts to 44%. The Shenzhen Stock Exchange sets a 10% limit. The new exchange will not impose restrictions on this parameter during the first five days of trading. In addition, different classes of shares can be placed on the Star Market.
In order to participate in trading on a new stock exchange, an investor must have at least 500 thousand Yuan in the account and trading experience of at least two years.
The government of the People’s Republic of China hopes that the analogue of Nasdaq will provide an opportunity to attract technology companies to the listing in China.