China’s Science and Technology Innovation Board, or STAR Market, has faced a downtrend on the second trading day.
Compared with the first day's final performance (some of the stocks surged over 400%), markets saw a majority (21/25) of "STAR companies" dipping.
By the midday break, four companies (Espressif Systems, Forecam, Micro-Tech, AMEC) led by the chipmaker Espressif Systems (688018.SH), which finished 137.32% above its IPO price, managed to post gains. Markets finally closed at 3:30 p.m., keeping status quo with minor changes.
The turnover of 25 companies in the STAR Market today exceeded CNY 22.8 billion (USD 3.31), less than half of the first day's trading volume of CNY 45.8 billion (USD 6.66 billion).
According to China Securities Journal's yesterday tracking, the top five seats of 25 new stock sellers are occupied by institutions, while the main purchases come from individual accounts (over 90%). Unlike the U.S., in China a vast majority of investment decisions are made within the market institutions such as pension funds. Nevertheless, the Chinese market is filled with irrational individual players.
In an attempt to address investor concerns like market volatility and lack of governance, the STAR Market seems to stumble in China's current financial market evolution. Many investment funds, after collecting satisfying first-day gains, choose the wait-and-see strategy.