Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

China's answer to the Nasdaq might be starting to fizzle

China's answer to the Nasdaq might be starting to fizzle

China's latest attempt to create a Nasdaq-style stock market appears to be running into trouble just three months in.
The Shanghai Stock Exchange launched its Star Market toward the end of July, with wild gains in prices and a few eye-catching IPOs since. But it has been forced to cancel the launch of a new index based on the market that was planned for Wednesday.

The reasons: There were too few companies on the board to justify its own index, and those that are on it were "relatively too small" in size, the exchange said in a recent statement. (The market's latest member started trading Monday, bringing the total number of listed stocks to 34, up from 25 at launch.)

The pool of stocks on the Star Market is microscopic compared to other major exchanges in China that have their own indexes, including the main market in Shanghai and a tech-focused market in Shenzhen. More than 3,000 companies are listed on those markets combined.

Investors also expect any index involving Star Market components to be a critical one to watch, the exchange said. That makes it all the more important to wait until the index is able to provide a better representation of the market, it added.

That's a pretty cool assessment of the market, especially given its remarkably hot debut. Stocks gained an average of 140% on the first day of trading. One company, Anji Microelectronics Technology, closed up 400%.

As of Wednesday, though, more than 90% of the stocks on the Star Market have lost about a third or more of the value they held at their peaks, according to data from Wind, a Chinese financial information provider.

"Apparently, the investor enthusiasm has faded," said Mark Huang, an analyst for Bright Smart Securities in Hong Kong. While the valuations of the Star Market companies are still high, they are returning to more "reasonable levels," he said.

The Star Market is part of China's bid for tech superpower status. Beijing hopes it will help China's tech companies tap into the vast wealth held by local investors. The country also wants to entice global leaders like Alibaba (BABA) and Tencent (TCEHY) to return to China from stock exchanges in New York and Hong Kong.

Huang said investors are probably going to pay close attention to upcoming earnings for the companies that are listed on the board - an opportunity to assess the quality of companies that are supposed to represent China's future.

Huang added that the board needs to attract more quality companies, so that it has a bigger pool of them to select for the component index. The Shanghai Stock Exchange has indicated that 50 companies will be included on its index — but only if there are more than 50 companies on the board. Otherwise, all of the stocks could be added to the index.

The Star Market may be on its way to adding more firms. As of Friday, the market had accepted applications from 162 companies, 42 of which completed the registration process.

"The board is still in a very early stage," said Hao Hong, managing director and head of research at Bank of Communications International.

He attributed the pullback seen in stock prices on the market to lower expectations from investors, adding that the board hasn't attracted much money yet.

"I think lots of investors still have a wait-and-see attitude," he said.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
House Republicans Move to Defund OECD Over Global Tax Dispute
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
CEO Resigns Amid Controversy Over Relationship with HR Executive
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Air India Pilot’s Mental Health Records Under Scrutiny
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Bitcoin Reaches New Milestone of $116,000
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
×