China’s star market aims to take the Nasdaq

The Star Market, China’s response to Nasdaq, celebrates its first anniversary this week.

The high-tech stock market was created at the request of President Xi Jinping as relations with the United States began to deteriorate.

Officially called the Science and Technology Innovation Board of the Shanghai Stock Exchange, it now includes more than 120 companies.

It is already the most valuable stock market in Asia, valued at over $ 400 billion (£ 314 billion).

It hit a record high this month in terms of new listings as it raised more than $ 7 billion, a 46% increase in July 2019 according to figures from data firm Refinitiv.

This was fueled by last week’s list of semiconductor maker SMIC, China’s largest share sale in a decade.

Experts believe the Star market is in a strong position to attract listings from both Hong Kong, given political tensions there, and the United States, which is restricting the listing of Chinese firms.

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But can it rival the Nasdaq 100, which is more than 20 times bigger?

The Nasdaq (National Association of Automated Securities Dealer Quotes) stock market lists its largest technology firms within an index called Nasdaq 100.

This index presents some of the world’s most valuable technology companies, including Apple, Microsoft, and Amazon. It was worth almost $ 10 billion at the end of 2019.

To commemorate its first anniversary, the Star Market announced Thursday that it was also dividing its largest lists, to be included in the Star Market 50 Index.

“The move to fully open Chinese capital markets is obviously a long-term reality, so the success of a continental-type Nasdaq will always happen in the future,” said Andy Maynard, managing director of the Chinese investment bank. Renaissance.

“The reality of the size and complexity of the game in China’s new economy will always make China attractive globally, just as Nasdaq has done since the days of ‘dot.com.'”

“The conditions are very attractive and would definitely make the Star Market a worthy rival to Nasdaq,” added Jacob Doo, chief investment officer at Envysion Wealth Management.

An important factor is that the Star market listing requirements “are less stringent compared to Nasdaq, which has imposed restrictions on IPOs for Chinese companies,” Doo said.

Ant Group, Alibaba’s financial arm, plans to go public on the Star market this year and could attract more tech companies to follow suit.

Chinese automaker Geely, which makes black taxis in London, also has plans to list on the Star market.

However, experts say the Star market must be more accessible to foreign investors to continue to attract more listings.