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QINGDAO TODAY
在线翻译:
szdaily -> Markets -> 
Fund managers rush for new tech board
    2019-03-05  08:53    Shenzhen Daily

DOMESTIC asset managers are rushing to set up funds targeting Shanghai’s upcoming Nasdaq-style technology board, in a race likely to fuel concern that China’s speculative trading culture could lead to more price bubbles.

Applications from mutual fund stock pickers exceeded 20 in the first week of submission, from managers such as Huaan, E Fund, Fullgoal and GF, according to the latest disclosure on the China Securities Regulatory Commission (CSRC) website.

The strong demand before the announcement of any potential listings, plus investors’ inexperience in valuing growth-focused stocks, has raised fear among market participants of the sort of price bubbles seen on existing tech boards such as the Shenzhen Stock Exchange’s ChiNext, particularly as the new board will ease trading restrictions such as maximum daily trading limits.

“A company still needs to meet strict standards, and undergo relevant procedures to list,” CSRC Vice-Chairman Li Chao said of the quality of potential listings at a Wednesday news conference. “It’s not as if whoever wants to list, can list.”

The Shanghai Stock Exchange’s “technology innovation board” is due to launch in the coming months, or even weeks, with trading and listing rules published only as recently as Friday.

The board marks a radical departure for the domestic stock market as its registration-based listing process, akin to that used by Nasdaq, will replace regulatory vetting, and control over the timing of listings will pass to IPO hopefuls rather than regulators.

It will also allow pre-profit companies to list, a concept common in the United States, which dominates tech listings, and one that was adopted in Hong Kong last year.

Though listings will be overseen by the Shanghai bourse, bankers still expect unofficial oversight from the CSRC as participants at all levels acclimatize to a pricing system based more on judgement and market forces than rigid rules.

Investment banker Liu Guangfu at TF Securities said underwriting for the new board will be “a huge challenge for investment banks in China, which have never really done the job of evaluating IPOs,” having previously relied on pricing guidance from the government.

In another show of support for the development of Chinese technological innovation, the board will for the first time in China allow listings by money-losing tech startups. (SD-Agencies)

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