China just launched its own Nasdaq for local tech IPOs and one stock soared more than 500%

  • China launched its answer to the Nasdaq and some shares surged. More than 24 stocks IPO’d.
  • The Star Market was announced by President Xi last year, in the hope it will encourage domestic tech investment and Chinese businesses listing in China. 
  • More than 140 companies have signed up totalling $18.7 billion.

China launched its new tech focused stock exchange today — the Star Market, in what is being seen as China’s answer to the Nasdaq. 

Like the Nasdaq, equities are focused on tech and science, and opening trade was met with a frenzied burst, with gains in all 25 companies making their debut, including one company rising 520% on debut. 

The stocks, according to Bloomberg, surged on average 140% at close, with most slipping from their highs earlier in the day. 

The Star market is China’s attempt to make sure they don’t lose the next Alibaba or Tencent which are both traded abroad, in New York and Hong Kong, respectively. 

It’s been widely endorsed by top officials, and helped generate enough enthusiasm that firms raised a combined $5.4 billion, 20% more than what was planned. Over 140 companies signed up to trade, totalling more than $18.7 billion.

Chipmakers Anji and Montage Technology rose as much as 520% and 285% respectively, and four of the 25 stocks gained more than 200%. 

Sharp rises are unusual in China, where stock movements are normally capped, unlike the Star Market. The Shanghai and Shenzhen exchanges permit main board stock prices to move 44% on the first day and thereafter 10%. 

Analysts have said that the government’s backing is seen as a big pull for investors, who also must have two years of trading experience to trade, as well as 500,000 yuan ($72,686.)

Companies will be able to register without having to apply to the government regulator, ensuring greater numbers of companies will be able to be traded. Startups and other companies that haven’t yet recorded a profit will also be able to be traded — a departure from what was previously allowed.

Asian Shares Pull Back As Hopes For Big Fed Rate Cut Fade

Asian stocks ended mostly lower on Monday as hopes for an aggressive rate reduction by the U.S. central bank faded and tensions between Britain and Iran rose in the Gulf.

Chinese stocks closed lower as Nasdaq-style technology board on the Shanghai Stock Exchange marked its debut.

The benchmark Shanghai Composite index dropped 37.23 points or 1.27 percent to 2,886.97 while Hong Kong’s Hang Seng index ended down as much as 1.37 percent at 28,371.26.

Japanese shares fell modestly as investors scaled back expectations of a 50-bps rate cut at the July 30-31 Fed meeting. Prime Minister Shinzo Abe’s ruling bloc won a solid majority in Japan’s upper house election on Sunday, helping limit the downside to some extent.

The Nikkei average ended down 50.20 points or 0.23 percent at 21,416.79 while the broader Topix index closed 0.49 percent lower at 1,556.37.

Canon fell 1.2 percent and Nidec gave up 0.9 percent ahead of their earnings results due this week.

Asahi Group Holdings slumped 8.9 percent after the brewer said it would issue up to 200 billion yen (approx. $1.85 billion) of shares to fund its planned purchase of Anheuser Busch InBev’s Australian operations.

Chip-related firms such as Advantest, Taiyo Yuden Co and Screen Holdings climbed 2-3 percent after Taiwan’s TSMC forecast that robust demand for 5G chips will drive a stronger second-half.

Australian markets edged down slightly as expectations for a smaller-than-expected U.S. rate cut curbed investor appetite for riskier assets.

The benchmark S&P/ASX 200 slid 9.10 points or 0.14 percent to 6,691.20 while the broader All Ordinaries index ended marginally lower at 6,781.20.

Higher iron ore prices helped lift miners, with BHP and Rio Tinto rising 0.7 percent and 0.8 percent, respectively. Smaller rival Fortescue Metals Group rallied 2.3 percent ahead of its quarterly output results due on Thursday.

Santos, Origin Energy and Oil Search climbed between 0.7 percent and 1.7 percent as oil prices rose on concerns that Iran’s seizure of a British tanker last week may lead to supply disruptions in West Asia.

Beach Energy soared as much as 5.3 percent after beginning construction work on a $22 million redevelopment of the Katnook gas-processing plant near Penola.

The big four banks ended narrowly mixed while healthcare stocks such as CSL and Cochlear ended down over 1 percent.

Seoul stocks finished little changed with a negative bias after the release of weak trade data showing that the country’s exports for the first 20 days of this month fell a sharp 13.6 percent from a year earlier. Investors also took a cautious stance ahead of the corporate earnings season.

New Zealand shares rose notably to extend gains for the fourth straight session. The benchmark S&P/NZX 50 index climbed 71.54 points or 0.67 percent to 10,824.69. Market heavyweight a2 Milk Company advanced 1.7 percent to reach a record high.

U.S. stocks fell on Friday as investors digested a slew of corporate earnings reports and remarks from a top Fed official dampened hopes of a near-term interest rate cut.

The Dow Jones Industrial Average dropped 0.3 percent, the tech-heavy Nasdaq Composite shed 0.7 percent and the S&P 500 gave up 0.6 percent.

Asian Markets Mostly Lower

Asian stock markets are mostly lower on Monday following the weak cues from Wall Street Friday amid toned down expectations of an aggressive interest rate cut by the Federal Reserve later this month and on rising tensions in the Middle East. Crude oil prices rose nearly 1 percent, extending gains in Asian trading.

The Australian market is modestly lower as gains by mining and oil stocks were offset by weakness in banks.

The benchmark S&P/ASX 200 Index is declining 12.80 points or 0.19 percent to 6,687.50, off a low of 6,685.20 earlier. The broader All Ordinaries Index is down 10.20 points or 0.15 percent to 6,776.00. Australian stocks closed higher on Friday.

Among the big four banks, ANZ Banking, Commonwealth Bank and Westpac are lower in a range of 0.2 percent to 0.6 percent, while National Australia Bank is edging up 0.1 percent.

In the oil sector, Oil Search is rising more than 1 percent, Santos is up 0.7 percent and Woodside Petroleum is adding 0.6 percent after crude oil prices rose on Friday.

The major miners are also higher. Fortescue Metals is higher by more than 1 percent, BHP Group is advancing 1 percent and Rio Tinto is up 0.1 percent.

Gold miners are gaining despite gold prices edging lower on Friday. Evolution Mining is advancing more than 1 percent and Newcrest Mining is rising 0.6 percent.

In the currency market, the Australian dollar is higher against the U.S. dollar on Monday. The local currency was quoted at $0.7045, compared to $0.7068 on Friday.

The Japanese market pared early losses and is now modestly lower. Investors digested news that Japanese Prime Minister Shinzo Abe’s ruling coalition retained its majority in Sunday’s upper house of Parliament elections.

The benchmark Nikkei 225 Index is down 53.70 points or 0.25 percent to 21,413.29, after touching a low of 21,317.85 earlier. Japanese stocks closed notably higher on Friday.

The major exporters are mixed despite a weaker yen. Canon is lower by almost 1 percent and Sony is down 0.4 percent, while Mitsubishi Electric is adding 0.3 percent and Panasonic is rising 0.2 percent.

In the tech space, Advantest is rising more than 2 percent and Tokyo Electron is higher by more than 1 percent.

In the auto space, Toyota Motor is advancing almost 1 percent, while Honda Motor is lower by 0.2 percent. In the oil sector, Inpex is up 0.5 percent while Japan Petroleum is edging down 0.1 percent.

Market heavyweight SoftBank is gaining more than 2 percent, while Fast Retailing is lower by 0.3 percent.

Among the major gainers, Chiyoda is rising more than 4 percent, IHI Corp. is gaining almost 4 percent and Taiyo Yuden is higher by more than 3 percent.

On the flip side, Asahi Group is losing more than 6 percent after the Japanese brewer agreed to acquire the Australian operations of Belgian company Anheuser-Busch InBev for an enterprise value of A$16 billion.

Toho Co. is lower by almost 5 percent, while Shiseido Co., Daiichi Sankyo and Olympus are down more than 2 percent.

In economic news, Japan will provide June numbers for convenience store sales today.

In the currency market, the U.S. dollar is trading in the upper 107 yen range on Monday.

Elsewhere in Asia, Shanghai, South Korea, Singapore, Indonesia, Malaysia and Hong Kong are also lower, while New Zealand and Taiwan are modestly higher.

On Wall Street, stocks failed to sustain an early upward move and closed lower on Friday. The initial strength reflected a positive reaction to upbeat earnings news from software giant Microsoft Corp. Buying interest waned shortly after the start of trading, however, as traders looked ahead to the slew of earnings news due to be released next week and digesting the New York Federal Reserve’s efforts to walk back comments President John Williams made Thursday that seemed to endorse a near-term interest rate cut.

The Dow fell 68.77 points or 0.3 percent to 27,154.20, the Nasdaq slid 60.75 points or 0.7 percent to 8,146.49 and the S&P 500 dropped 18.50 points or 0.6 percent to 2,976.61.

The major European markets showed modest moves to the upside on Friday. While the French CAC 40 Index closed just above the unchanged line, the U.K.’s FTSE 100 Index edged up by 0.2 percent and the German DAX Index rose by 0.3 percent.

Crude oil prices rose on Friday after the U.S. Navy shot down an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows. WTI crude futures for August ended up $0.33 or about 0.6 percent at $55.63 a barrel. In Asian trading Monday, crude oil is further gaining $0.53 or 0.95 percent to $56.16 a barrel.