China's Nasdaq-style board, ChiNext, turned 10 years old on Wednesday, with the board announcing plans to implement reforms in a bid to further attract startups interested in innovative business.
According to Xinhua, ChiNext recorded a total market capitalization of 5.59 trillion yuan and 774 listed companies as of October 21. Inaugurated on October 23, 2009, the capital platform is now working to impress new potential listings.
Zhongtai Securities chief economist, Li Xunlei, noted that ChiNext saw significant growth over the past years can be a reflection of China's increasing prowess in technology as well as upgrades in the service sector.
As part of the efforts in implementing reforms for the platform's operations, the China Securities Regulatory Commission (CSRC) confirmed over the weekend that it will help Shenzhen's capital market to improve its services.
The platform has implemented a registration-based initial public offering (IPO) system that will prevent the disclosure of crucial information to third parties. Listing companies also have more freedom in deciding the valuation and scale of new share offers.
Li revealed that the reforms ChiNext seeks will help improve the platform's competitiveness, especially with the rise of other boards such as the stellar launch of Shanghai's sci-tech innovation board, the STAR Market.
While some financial experts are worried about the potential impact of the STAR Market to ChiNext, some analysts noticed that the sci-tech board may be starting to fizzle out just around three months since its powerful launch.
According to the South China Morning Post, the overall market capitalization on the board of 34 listed firms dropped by around 22 percent. The average daily turnover also declined by over 60 percent.
Some investors are reportedly shunning the Shangai board due to the high minimum trading account balance of 500,000 yuan for interested investors. The high valuations have been a thorn in the neck of the board since its launch.
Analysts are expecting to see the Chinese economy driven by innovations in the tech industry before they start getting interested again in trading through the STAR market.
News of reforms of the ChiNext board came following the Chinese government's confirmation that it is opening up China's financial sector to foreign investors and institutions that should help improve the economy.
While it may take several years before companies feel the apparent benefits of China's opening up initiative, reforms are expected to be implemented in the financial industry in the coming months.
China announced that it will further open opportunities to foreigners in its financial sector. The opening up is one of the country's ways of expressing its willingness for investors and companies to explore the massive Chinese market.
