China will compete with the "NASDAQ" American "Star"

China will compete with the "NASDAQ" American "Star"

London: Middle East

Like the US Nasdaq, China has a similar financial market and began Monday to register on a new platform of the Shanghai stock exchange for technology stocks, facing growing competition between Beijing and Washington .
This is one of the most important reforms of the Chinese market, the Asian giant seeking to adapt its business model to new technologies and high value-added products at the height of a trade war with the United States.
Nasdaq, the "supermarket", has been given flexible terms to help promising companies raise capital more easily to finance their growth. The stated goal is also to keep domestic technology companies in China, at a time when Beijing is competing with Washington, to dominate the high-tech sector.
"If China does not launch its new platform on the technology exchange, it will miss the opportunity to focus its economic development on the new economy," said Yang Delong, chief economist at Shenzhen First. Provident Management.
Large Chinese companies such as Alibaba, the e-commerce company, and Baidu, have been on Wall Street for several years. The internet giant Tenst has chosen the Hong Kong Stock Exchange.
When large Chinese companies are listed abroad, Beijing has fewer means to attract capital. On the other hand, the restrictions imposed by Beijing on the purchase of foreign securities prevent Chinese investors from contributing to the success of these companies.
There are currently more than 3,000 companies listed on NASDAQ by Wall Street, while China has only 25 companies, with no big name. Unlike current legislation, the "Star Market" platform allows companies that have not yet received any profits to be listed on the stock exchange. During the first five days of registration, no limit is imposed on daily fluctuations (now 10% on the Shanghai and Shenzhen stock exchanges). These days, the threshold is 20%.
The construction of a stock exchange platform in Shanghai, especially for technology stocks, was unveiled in November 2018 by Chinese President Xi Jinping. Until now, Shenzhen, China's second largest stock exchange after Shanghai, has been the technology leader in listing.
The 25 shares of the supermarket listed on the stock market increased about 140% on average at closing, and Angie Microelectronic Technology, maker of semi-transportation materials, grew by 520% ​​before bringing these gains back to about 400% at closing. Analysts said the gains were due to China's willingness to have a strong market and investor expectations, backed by government propaganda. "It's a new boom," said Ronald Wan, managing director of Partners Capital International in Hong Kong. "These gains will not last long and they look like short-term speculation.
According to Wind's Chinese data company, the value of listed companies was 120 times above average at the end of the first day, while shares in the Nasdaq and Shenzhen technology market were generally 24 times higher. high, according to Rivenft data. China is encouraging companies to rely less on foreign funds and technology, a new campaign that has intensified during the US-led trade war since Trump's leadership targeted Huawei, the world's leading player in the industry. smart phones and fifth-generation network provider. Previous attempts by China to create a competing market for Nasdaq in 2009 and 2013 have failed due to a lack of quality and limited trading volumes, while experts expect the market is different.
According to the Shanghai Stock Exchange, more than 100 companies have applied to be listed and the stock exchange has confirmed that it would welcome innovative platforms in six emerging strategic industries, including information technology, intelligent manufacturing, space, renewable energies and biotechnology.
All sectors are in line with China Made in 2025, the latest five-year plan to transform the country into a super-manufacturing force that dominates the high-tech industries. The 25 listed companies raised more than 37 billion yuan (5.4 billion US dollars). "We need continued investment in R & D to break the foreign monopoly," said Chen Wenyuan, chairman of Suzhou Technology. The company manufactures test equipment for integrated circuits and touch screens as well as its main customers, "Apple" and "Samsung".
The company 's "Star" allows dual listing, which aims to attract Chinese companies that currently carry on business overseas in the form of Alibaba.
"I think the major Chinese tech companies will come back with better evaluation and favorable policies," said Hao Hong, general manager and head of research at Boekem International.

China

Economy of China