China’s answer to Nasdaq

When the gong was sounded back in July to mark the first day of trading at Shanghai’s Star Market, which was hailed by state media as China’s answer to Nasdaq, expectations were sky-high. The first 25 companies to list on the board, run by the Shanghai Stock Exchange, were seen by analysts as just the first wave, with some predicting the number would hit three figures by the end of the year. Unleashing this potential would be Star’s listing regime, in which regulators played a limited role in the approval process and had no say over how shares priced or when they came to market, unlike other bourses on the mainland. Back then more than 140 technology and science companies had signed up to join the new board, aiming to raise a total of Rmb128.8 billion ($18.1 billion). But the flood has slowed to a trickle. Just five more companies have sold shares since then, raising about $826 million in total… There is no official gauge tracking Star stocks’ performance, although Shanghai’s exchange is due to launch the Star 50 benchmark in October, after a week-long national holiday… For now, shares on Star have yet to come too far off their early gains. The total market capitalisation of the first 25 stocks to list has barely budged since the end of its first week, while trading volumes have fallen. 

Hudson Lockett