With the STAR Market, the Shanghai Stock Exchange's sci-tech innovation board, set to mark its 100th day of trading on Tuesday, experts are lauding its role in China's national strategy of innovation-driven development via science and technology.
The market, called the Chinese version of the NASDAQ, was designed to focus on companies in high-technology and strategic emerging sectors. It started trading with 25 listings and now has 36.
The introduction of the technology innovation board and its pilot registration system is a milestone event for China's capital market, Li Daxiao, chief economist at Shenzhen-based Yingda Securities, told the Global Times on Monday.
The bourse offers a great fundraising channel for science and technology start-ups, which is in line with the implementation of China's innovation-driven strategy, Li said, noting that it is a demonstration of supporting technology development through the capital market.
So far, six STAR Market companies have released third-quarter financial reports, with five reporting a profit, according to the China Securities Journal on Monday.
With an innovative registration system, the STAR Market improved the inclusiveness and adaptability of China's capital market, and it will be a great driving force for the nation's economic upgrading, Dong Shaopeng, an adviser to the China Securities Regulatory Commission, told the Global Times on Monday.
Innovations from the STAR Market, such as a registration system for IPOs, will gradually expand to other capital markets in China and promote the development of the main board and others, Dong noted.
"The STAR Market's overall operations for the past three months have been relatively stable with actively involved participants," Li said.
In the first month, the shares of all listed companies rose, with an average surge of 171 per cent compared with the IPO price and a median rise of 160 per cent, according to a statement of the STAR Market.
As for the listing sponsors, 18 of these brokerages had reaped paper gains of more than 1.7 billion yuan ($241 million) as of Sunday, and seven of them gained more than 100 million yuan, the China Securities Journal reported, citing data from financial information platform Wind.
"However, there are some problems, including hefty premiums and relatively high turnover rates," said Li, noting that the market is still lacking long-term investors.
Some investors don't clearly understand the board's initial aims of supporting technology start-ups and enhancing China's capital markets, and some also aren't fully aware of risks, Li noted.
"In the end, the share price should reflect a company's intrinsic value, instead of its rarity," Li said, noting that some share prices have been pushed up by lots of money chasing relatively few companies.
As the board keeps expanding, it will gradually level off, he said.
