Circuit breakers trip; shares will rise and China’s Nasdaq-style bourse debut

SHANGHAI (Reuters) – the Trade will hit a fever pitch, with shares rocketing as much as 520%, and China’s new Nasdaq-style board for domestic tech companies, and for the first time on Monday, with a valuation of more than even the expectations of seasoned investors are braced for a wild ride.

Shanghai’s y Secretary Li Qiang (centre, L) and the China Securities Regulatory Commission (CSRC) Chairman Yi Huiman (centre R) attend the listing ceremony of the first batch of companies in the STAR Market, which is China’s new Nasdaq-style tech to the board of directors of the Shanghai Stock Exchange (SSE) in Shanghai, China, on July 22, 2019. REUTERS/Stringer

One of the first batch of 25 companies, ranging from chip makers, health care companies, and more than twice as much as their frothy initial public offering (IPO) prices on the STAR Market managed by the Shanghai Stock Exchange.

“The price increases have been even more weird than I had expected,” said Stephen Huang, the vice-president of Shanghai to See the Truth, and Investment Management. “These are great companies, but valuations are too high. She is now is not good at all.”

Modeled after the Nasdaq stock exchange, and the complete U. S style, M-system, the STAR of China’s most daring attempt in the capital, and the reform of the market. It is also driven by Beijing’s ambition to become a technologically self-sufficient as a long-term trade war with Washington and catches of the Chinese tech firms are in the cross-fire.

The trade in Anji microelectronics Technology (Shanghai) Co., Ltd. (688019.SS), a semiconductor company, was briefly interrupted twice, when the company’s shares hit a two machines, the first with an increase of 30%, after climbing 60% in the market open – was designed to take the frenzy to buy it.

The mechanisms for doing very little in order to keep track of Anji, shares, check-in, when they rose to as much as 520% of the initial public offering price in the morning session. By the midday break, Anji shares of leap was made in 415% of the initial public offering price, giving the company a valuation of 249 of the times 2018 earnings.

Master Of Harmontronics Automation Technology Co., Ltd. (688022.SS), however, you have to change the fuse in the opposite direction, falling to 30% from the open, before rebounding. However, by the afternoon of the shares of the company, there were 113% higher than the IPO price.

Wild share swings, partly as a result of the individual rules of the market, it had been widely expected. The Ipo was oversubscribed by an average rate of about 1,700 times less than the private investors.

The power of the Market does not set limits to the stock price during the first five days of trading. That compares with a maximum of 44% for the first time on the other boards is in China.

In the subsequent trading sessions, shares in the new tech, the board of directors will be permitted to increase or decrease up to 20% in a single day, double the 10% daily limit at the other forums.

Regulators last week warned individual investors against “blind” to the purchase at the STAR Market shares, but said the changes were good.

Relaxed trade rules were designed to “give the players enough freedom in the game, it will accelerate the formation of the equilibrium prices, and the promotion of price-setting, efficiency, and the” Shanghai Stock Exchange (SSE) said in a statement on Friday.

The SE added that it was normal to have large fluctuations in the new tech stocks, as these companies usually have uncertain prospects are difficult to evaluate.

The exchange cited the large fluctuations in the Ipo of the company shares on the Nasdaq stock exchange and the Hong Kong stock exchange, and, in particular, the single was recently listed electric car company Nio Inc. (NIO) and the Chinese start-up, Luckin Coffee along with IT.D).

SW said that an index tracking the STAR Market, will be launched on the 11th business day after the debut of the 30th company on the map.

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Investors are focusing at the STAR Market in the short term, weighing on the main board of the directors, in terms of liquidity and attention, said Zhu Junchun, chief analyst with Lianxun Securities.

This effect was evident on Monday, with the benchmark Shanghai Composite Index .SSEC immerse themselves 0.57% by noon, and the blue-chip CSI300 index .CSI300 of the market area.

Slideshow (3 Images)

Huang at the Shanghai to See the Truth, suggests that rational investors are waiting on the sidelines and observe the marketplace for one month, and to make decisions.

Some investors, however, will be greeted with the debut of its board of directors, which Beijing hopes will propel the investment in the sector and help the country to innovate and compete in the global marketplace.

“The night Market will be opening a new chapter for the chinese market,” said Yang, Tingwu, deputy general manager at Tongheng an Investment, a hedge fund house in the Province of Fujian in Southern China. “Here’s to the time of the Chinese dream come true in the capital markets!”

Additional reporting by Luoyan Liu, and Winni Zhou; Editing by Jacqueline Wong

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