China has launched its science and technology innovation board at the Shanghai Stock Exchange, opening a new channel for tech companies to raise capital, Xinhua News Agency reported on Thursday.
Yi Huiman, chairman of the China Securities Regulatory Commission, presided over the launch ceremony of the board, which is formally called the STAR Market, at the Lujiazui Forum on Thursday, according to China Daily.
On June 5, the Shanghai Stock Exchange approved the IPO applications of three companies that aim to list on STAR, including medicine maker Shenzhen Chipscreen Biosciences and semiconductor producer Anji Microelectronics (Shanghai) Company Limited. The following week, on June 11, regulators gave their nod to another three companies.
The STAR Market’s launch stems from a decision made by the Chinese central government in November, allowing unprofitable companies to go public. This opened the door for tech firms to seek out new capital from retail investors. In March, Chinese investors were already setting up trading accounts for the bourse.
By June 5, a total of 119 companies have applied to be listed on STAR.
Stocks listed on STAR will have no cap on daily gains, though investors will be required to hold their shares for at least one business day after acquiring them.
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