(Yicai Global) Feb. 25 -- Low financing costs, ample government funding and Shanghai's new Nasdaq-style board all contributed to a 16.5 percent gain in financing for the city's technology companies last year, according to a new central bank report.

Shanghai's tech firms raised CNY790.4 billion (USD112.4 billion) between them in 2019, according to a document released by the People's Bank of China's Shanghai branch yesterday.

The municipal government has introduced a raft of preferential policies to help support technology firms in a bid to cement the city's position as a global science and innovation hub.

Financing costs for such businesses in Shanghai are low, the report said. Interest rates were around 4.28 percent in the fourth quarter, down 25 basis points from a year earlier. That is 62 points lower than loans to other Shanghai companies and 176 points below the national average.

Equity financing rose 8.5 percent to CNY298.2 billion (USD42.5 billion) last year. Of that, CNY80.8 billion came from initial public offerings, an increase of 11.1 percent from a year earlier, including CNY5.5 billion from listings on the Shanghai Stock Exchange's new Star Market, the report said.

Injections of private equity capital rose 14.7 percent, most of which was to startups. The government's industrial fund nearly doubled in size in 2019, indicating the municipality has given the fund adequate resources to boost venture capital.

Bonds issued by Shanghai's tech firms jumped 30.4 percent to CNY116 billion (USD16.5 billion) in the year, the report said. Loans, excluding notes, came to CNY239.7 billion, up 22.8 percent from a year earlier. That was 15.6 percentage points more than the balance of loans to non-financial companies citywide.

The average interest rate of newly issued bonds by tech firms in the metropolis was 2.41 percent in the fourth quarter, down from 4 percent a year earlier and 195 basis points lower than the bond issuing rates of companies nationwide.

Editor: Kim Taylor