The Star Market Overview 2Q 2020
Trends, stocks and insights
On July 22, 2019, the Science and Technology Innovation Board, or the Star Market, got off to a start in Shanghai. The new trading venue is one of the most ambitious projects under China’s economic reform course. The Asian nation’s answer to Nasdaq, it was designed to draw together and finance the country’s fast-growing technology-driven enterprises and lay a foundation for a healthy financial system, improving the regulatory mechanisms.
Many novelties appeared with the Star Market. Previously, it normally took Chinese companies two to three years, a vast stock of patience and a tiny bit of luck to successfully go public locally. The new vetting system has shrunk the review process to just a few months. At the same time, the tech startups experienced a huge relief from the specific terms of the listing standards.
In the report, we analyze the performance of the stocks listed on the board as well as all the new public offerings that happened in the second quarter of 2020. Apart from that, we touch upon essential narratives affecting China’s ongoing financial sector reform, paying special attention to the internationalization of its public equity system.
Among the findings:
► The free-float market cap of all the Star Market-listed firms reached CNY 377 billion on June 30, accounting for over 1.30% of the entire A-share market.
► New public companies raised CNY 21 billion in 22 Star Market IPOs in the three months through June 2020 – nearly 32% and 19% of that of the A-share market in terms of the number of listings and proceeds.
► The Star Market’s semiconductor stocks were up by 22.43%; the cluster saw one new listing this quarter.
► The software developers therein added 27.29% to their market caps, with four new stocks listed.
► China’s financial sector continued to open up, with QFII/RQFII canceled and major global index providers paying attention to the country’s equities.
► The mechanisms allowing transition from other boards to the Star Market were further improved; the ChiNext board mapped its way to the registration-based system.
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