(Yicai Global) Aug. 25 -- Allowing fresh shares to move wildly on their first trading day is beneficial for newly listed firms, as the first group of companies that went public yesterday when the Shenzhen-based ChiNext board launched a new registration-based initial public offering system could agree.

Some 10 of the 18 Shenzhen tech board-listed companies, mostly involving equipment manufacturing, pharmaceuticals, culture and art, and car production, had their stock prices more than double yesterday. The 18 firms' trading turnover was CNY23 billion (USD3.3 billion).

Based on the board's new rules, equity prices have no limits for the first five days since listing but after that, they can rise or fall by 20 percent over a single day. The daily maximum used to be 10 percent up or down.

The 18 firms raised CNY20.1 billion via their share issuances, up from their target of CNY5.7 billion (USD825 million), according to Wind data. The average revenue of these companies was CNY1.1 billion last year, with CNY167 million (USD24.2 million) in net profit.

One of the upstarts was medical device maker Contec Medical Systems, whose equity price [SHE: 300869] jumped to CNY118 (USD17.10) yesterday, up more than 11 times, after rising as much as 30 times during the day. Today, the shares were 8.5 percent up in the afternoon.

The 18 stocks' surge shows market enthusiasm and investors’ support for new economy firms, Securities Times reported, citing Yang Delong, chief economist at Qianhai Kaiyuan Fund Management.

But investors should not get used to such strong rallies. Although the new rules may boost investing sentiments, they should not majorly change the markets, as few stocks have been able to jump or tumble by the allowed 20 percent on Shanghai's Star Market over the past year, according to Yang. The one-year-old Nasdaq-style board is the only mainland board where share prices may swing that much.

The tech-heavy ChiNext board has promoted the development of China's venture capital sector. Chinese VCs managed CNY2.4 trillion (USD347.3 billion) in assets by the end of 2018, up from CNY160.5 billion in late 2009, and ranking No. 2 worldwide, Securities Daily reported, citing an analyst.

The ChiNext Price Index, which tracks 100 of the largest firms listed on the board, closed at 2,684.63, up 1.98 percent yesterday. It was 0.9 percent up this afternoon.

Editor: Emmi Laine