(Yicai Global) Dec. 29 -- Three and a half years on from its launch, the stocks listed on Shanghai’s tech-focused Star Market have a combined value of CNY5.8 trillion (USD833 billion), according to Shanghai Stock Exchange data.
The number of companies listed on the Nasdaq-like board had soared to more than 500 as of yesterday, from an initial 25 in July 2019.
About 97 percent of the 500 firms had secured venture capital before listing, with an average investment of about CNY930 million (USD134 million), according to Yicai Global calculations.
“The Star Market has played a significant role in helping science and innovation enterprises get financing,” said Wu Yifan, an analyst at Changjiang Securities.
Total financing for the 192 information technology and hardware businesses listed on the market amounted to almost CNY350 billion (USD50.21 billion), Wu said.
Eighty-four integrated circuit firms, 107 biopharmaceutical companies, 24 new energy firms, and 50 software enterprises have listed on the Star Market so far, per the data.
More than 9.6 million investors have Star Market trading accounts, with 6.2 million of them active accounts. Professional investors account for 65 percent of the trading volume and 84 percent of the market’s value, making it the venue with the highest degree of institutional investment among Chinese stock markets.
Public funds own more than CNY580 billion of the market, and the share of market value in circulation has increased from less than 3 percent in 2020 to nearly 10 percent now. Long-term investors, such as social security funds, insurers, and Qualified Foreign Institutional Investors, own more than 5 percent of the market.
The Star Market has attracted global funds as well. Foreign institutions hold close to 4 percent of the market and account for more than 10 percent of the transaction value.
Fifty Star Market stocks have been included in the three major international indexes -- FTSE Russell, MSCI and S&P -- with 12 Star 50 exchange-traded fund products listed in the United States, the United Kingdom, Japan and other places overseas.
A market structure dominated by institutional and long-term investors can effectively curb short-term speculation, an industry insider told Yicai Global. It also tends to guide listed firms toward paying more attention to long-term business strategies rather than “dabbling in hot fields” or reckless cross-industrial operations, the person added.
Editors: Tang Shihua, Peter Thomas