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The new Nasdaq-style STAR market in China collapsed on the second day of trading with Reuters



© Reuters. FYTO PHOTO: Signature for STAR Market is visible after the first Shanghai Shanghai Stock Exchange listing

By Andrew Galbraith

lost a combined $ 1 billion on the second trading day on Tuesday, the day after the debut aboard three new billionaires.

All, except for four companies of the 25 listed shares, fell when investors took profits from profits, wiping around 9% of total market capitalization

The new board came out of the gates on Monday, with some shares rose by 520%. The enchanted purchase more than doubled increased the total shipboard capitalization from 225 billion yuan to 529 billion by the end of the day.

Even though the day's day-to-day move dropped, the drop was sharp enough for STAR's five largest individual shareholders, including newly-created billionaires on Monday to lose a combined $ 6.94 billion yuan on paper, according to Reuters , although none of them has lost the three-point claim.

The waterfalls were led by China Railway Signal & Communication Corp (SS :), which sank 1

8.4%, the most drastic drop during the day.

But even after this decline, his shares were 71% higher than their initial public offering.

Espressif Systems (Shanghai) Co. (SS :), a chipmaker for wireless communications, led to a day's profit, rising by 14.2%.

Yuwei, managing director of Olympus Hedge Fund Investments Co, said the STAR Market estimates may remain sparkling in the short term, but he expects to see more downturns in the next two to four weeks. "It's a serious balloon," he said. "Estimates do not support the fundamentals, but penny ratings benefit the big shareholders, but retail investors will be burned."

Yuan said he hoped regulators would not interfere excessively with trade and leave market forces to play their part. The board is managed by the Shanghai Stock Exchange.

Designed to replicate the Nasdaq technology, the STAR market is designed to be both a driver of capital market reforms, including a system of primary US public offering, and a way to encourage home-based technology companies against the backdrop of a damaging trade war with the United States.

In order to give market forces a greater role in price setting, trading rules are more free than other Chinese markets. There are no daily price limits for the first five trading days. (For more details on STAR Market see Factbox)

But some big investors have recommended caution, especially at the beginning.

Although the STAR market serves as a strategic hub for national financial reform, it will still experience circularity of market volatility and irrationality in the early stages, "Linda Zhou, Chief Investment Officer of Chinese Equities and Portfolio Manager at Fidelity International, said in an email.

Even institutional investors have to stay calm and return to the foundations of investment

The market debut, which has averaged 140% growth, even surpassed the expectations of veteran traders who are accustomed to wildlife fluctuations the largest stock markets in the country

Data from the Shanghai Stock Exchange on Monday showed margin credits, with investors totaling 1.51 billion yuan ($ 219.38 million) to increase their purchasing power [19659004] At this time, there is no STAR tracking index but the Shanghai Stock Exchange said it would release one on the 11th trading day on board after the debut of its 30th company


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