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Sep 03, 2019

Chinese regulator happy with success of new Star Market

More than 100 companies have applications for listing accepted

Taking stock of what has been an impressive start for China’s new tech-focused stock market – the Star Market – regulators have expressed their pleasure with the opening period for the exchange.

A spokesperson for Star Market regulator the China Securities Regulatory Commission, assessing its success since its launch in July, says in a statement: ‘Market enthusiasm has been at a high level and investor sentiment has gradually become more rational.’

From the perspective of the overall trend, after increases, fluctuations and the return to rationality, all 28 companies listed on the Star Market have seen their stock price rise, with an average gain of 171 percent over the issue price and a median increase of 160 percent.

In terms of the big risers, stocks in the biomedicine and new-generation information technology sectors are among the top gainers, while small and mid-cap stocks grew more than larger-caps.

‘During the first five trading days without the price limit, except during the first trading day, only two stocks triggered the in-session temporary suspension of trading and, in most cases, the stocks rose and fell within a range of 20 percent,’ reveals the spokesperson.

After the price limit took effect, the price increases and drops of individual stocks narrowed further to less than 10 percent, and only four stocks reached the upper limit a total of five times, reveals the spokesperson.

From the perspective of activity, trading was at a high level in the early stage and then gradually stabilized. In the first month of trading, the Star Market recorded a total turnover of ¥585 bn ($81 bn), with an average daily volume of ¥25.4 bn – accounting for 13.8 percent of the Shanghai Stock Exchange market.

A total of 152 companies have now had their applications for issuance and listing on the Star Market accepted, the spokesperson says.

Addressing the issue of ongoing regulation of the Star Market, the spokesperson adds: ‘There are a number of important institutional innovations in the continuous regulation process, such as simplifying disclosure of redundant information and tightening the sponsors’ responsibility for continuous supervision, which have been implemented and played their roles in improving the effectiveness of information disclosure, clarifying the questions in the market and ensuring the market order in information disclosure at the early stage of the market launch.’