Jun 14, 2019 (China Knowledge) - China has now officially launched its new Nasdaq-style Science and Technology Innovation Board with the new market being termed as the “STAR market”.
Trading on the new board is expected to commence within 2 months.
The new board aims to attract Chinese tech unicorns to list domestically instead of overseas after companies such as Tencent, Alibaba and Baidu have all chosen to list overseas rather than domestically.
The new board also aims to encourage greater investments into domestic tech companies and ensure that these companies continue to have access to capital markets amid an escalating trade war with the US.
Currently, the Shanghai exchange has already approved 6 firms to go public on the upcoming board. In addition, some companies on this board will also be selected to be eligible to trade on the Hong Kong-Shanghai Stock Connect, providing these companies with access to offshore capital markets.
The Science and Technology Innovation Board features a registration-based IPO mechanism where companies are required to fully disclose information regarding their earnings and operations and regulators will approve these companies for listing once the disclosed information has been verified to be true.
The market will then decide the value of the company based om its disclosed information.
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