3 Thoughts on China’s New Star Market
The brand new tech-oriented exchange in Shanghai, the Star Market, is Chinese President Xi Jinping's political brainchild – created to encourage domestic technology start-ups to list locally rather than overseas (such as on the Nasdaq in the US). There's been a lot of euphoria surrounding its first trading day but now that the dust has settled, here are my three initial thoughts.
Chinese equity markets are often retail-driven with investors chasing news flow and momentum instead of earnings fundamentals. While there was no price limit during the first week of trading, an eventual cap of 20% per day will be set, which is double the 10% daily limit on other boards within China.
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