Thu, 22 Aug 2019

SHANGHAI, China - China's answer to the Nasdaq made a spectaculatr debut on Monday with the capitalization of the new stock exchange rising by tens fo billions of dollars.

Many of the 25 debutant companies began trading at several hundred per cent higher prices than their IPO issue price.

The majority of companies at least doubled their value.

One rose as high as 520%.

"The price gains are crazier than we expected," Stephen Huang, vice president of Shanghai See Truth Investment Management told the Reuters Thomson news agencyf. "These are good companies, but valuations are too high. Buying them now makes no sense."

The new science and technology index dubbed Star Market took all the focus on Monday. Industrial stocks were shunned, sending the broader Shanghai Composite down 37.23 points or 1.27% to 2,886.97.

Feverish buying created a frenzy with circuit-breakers being triggered on the nex exchange's first day of trading.

The diea to establkish the Nasdaq-equivalent was made just a few months ago, in November 2018 by Chinese President Xi Jinping.

The new index has the objective of attracting innovative Chinese start-ups and tech companies that, up to now, have opted for the U.S., predominantly the Nasdaq, or Hong Kong stock exchanges.

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