SHANGHAI (Reuters) – Trading hit a fever pitch, with shares rocketing as much as 520%, as China’s new Nasdaq-style board for homegrown tech firms debuted on Monday, with valuations exceeding even the expectations of veteran investors braced for a wild ride.
All of the first batch of 25 companies – ranging from chip-makers to health care firms – more than doubled their already frothy initial public offering (IPO) prices on the STAR Market, operated by the Shanghai Stock Exchange.
“The price gains are crazier than we expected,” said Stephen Huang, vice president of Shanghai See Truth Investment Management. “These are good companies, but valuations are too high. Buying them now makes no sense.”
Modeled after Nasdaq, and complete with a U.S-style IPO system, STAR may be China’s boldest attempt at capital market reforms yet. It is also seen driven by Beijing’s ambition to become technologically self-reliant as a prolonged trade war with Washington catches Chinese tech…
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