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Tuesday, July 23, 2019, 11:29
Three billionaires created on day one of China's new tech board
By Bloomberg
Tuesday, July 23, 2019, 11:29 By Bloomberg

Yi Huiman, chairman of the CSRC, delivers a speech at the 11th Lujiazui Forum 2019 on June 13, 2019, the day when the Shanghai Stock Exchange launched a new science and technology innovation board. (PHOTO / XINHUA)

China’s much-hyped new trading venue for technology stocks started with a bang on Monday, creating three new billionaires.

The 25 companies that debuted on the so-called Star market rose an average 140% in the first trading day, making billionaires of the presidents of a battery-test equipment maker and an LCD-display manufacturer, as well as the chairman of a firm that produces artificial intelligence technology for smartphone cameras.

The first-day surges were thanks to Star market rules that are different from other venues in China

ALSO READ: China's sci-tech innovation board starts trading

Representatives of Suzhou HYC Technology Co, Zhejiang HangKe Technology Inc, Arcsoft Corp, Ningbo Ronbay New Energy Technology Co and Beijing Tianyishangjia New Material Corp couldn’t be reached for comment.

Anji Microelectronics Technology (Shanghai) Co led all stocks on the Star market Monday, closing up 400%. About 48.5 billion yuan (US$7.1 billion) of shares traded on the new venue, roughly 13% of the day’s turnover for the Shanghai and Shenzhen exchanges.

The first-day surges were thanks to Star market rules that are different from other venues in China. The new board is a testing ground for regulators, who have waived restrictions on valuations and welcome unprofitable companies, as well as shares with unequal voting rights. Stocks on the Star market have no daily price limits for the first five trading days, followed by a 20% daily cap in either direction.

READ MORE: China's new Nasdaq-style venue set for Monday trading start

Tom Zhou, a fund manager at Shanghai River East Asset Management, said he expects initial volatility as investors try to figure out fair valuations, but said the focus will eventually move to assessing whether the companies’ growth potential can support their share prices.

“If not, we will see share value retreat,” Zhou said.

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