THE biggest shareholders in China’s new Nasdaq-style STAR Market lost a combined US$1 billion on the second day of trade yesterday, a day after the board’s roaring debut created three new billionaires.

All but four companies of the 25 stocks listed on the market fell as investors took profits from opening day gains, erasing about 9 percent of the total market capitalization.

The new board roared out of the gates Monday, with some shares surging as much as 520 percent. Frenzied buying more than doubled the board’s total capitalization from 225 billion yuan (US$32.61 billion) to 529 billion yuan by the end of the day.

While the size of the moves on day two paled in comparison, the declines were sharp enough for STAR’s five biggest individual shareholders, including Monday’s newly minted billionaires, to lose a combined 6.94 billion yuan on paper, according to media calculations, though none lost claims to three-comma fortunes.

Falls were led by China Railway Signal & Communication Corp., which sank 18.4 percent, the sharpest drop of the day.

But even after that drop, its shares were 71 percent higher than their initial public offer price.

Espressif Systems (Shanghai) Co., a maker of wireless communication chips, led the day’s gain, rising 14.2 percent.

Data from the Shanghai Stock Exchange showed margin loans turbocharged trading Monday, with investors borrowing a total of 1.51 billion yuan to boost their buying power. Margin lending data for yesterday was not available by press time.

Some major investors have advised caution, especially in the early going.

“Although the STAR Market serves as strategic deployment for national financial reform, it will still experience rounds of market volatility and irrationality in the early stages,” Lynda Zhou, an investment officer at Fidelity International, said in a note.(SD-Agencies)