But the countrys answer to Americas Nasdaq is not for the faint of heart
Jul 22nd 2020
SHANGHAIS STAR market, a stock exchange for Chinas home-grown technology firms, celebrates its first birthday today. It has much to cheer about. Launched with an ambition to rival Nasdaq, a venue in New York where many American tech giants are listed, the toddler has surpassed the older ChiNext exchange in Shenzhen and already ranks second globally by capital raised in IPOs so far this year. And it just received a lovely present. On July 20th Ant Group, the financial-services arm of Alibaba, an e-commerce giant, said it had chosen STAR as one of two exchanges on which it is planning its long-awaited listing (the other winner is Hong Kong, which has also grown popular among fast-growing Chinese companies). Though the exact size and timing of the offering are still unknown, it could well turn out to be the largest IPO ever. Ant was last valued at $150bn in 2018; listing even a small portion of its shares could place it above Saudi Aramcos IPO last year, the largest yet at $26bn.
Two factors explain STARs appeal to issuers. First, it enjoys rock-solid political backing. Chinas government sees it as a way to channel capital towards young technologies it wants to nurture, from high-tech sensors to quantum computing. To help money flow, it has loosened restrictions that apply to stock offerings elsewhere (eg, on other Chinese exchanges, an informal price cap of 23 times earnings and a 44% ceiling on first-day gains). It has also fast-tracked IPO approvals, which can take years on other exchanges. Second, the mood has soured against Chinese companies in America, where many promising companies from the mainland would have traditionally considered listing. America has threatened to impose sanctions on Chinese officials. Earlier this year, the Senate also passed legislation that could force American-listed Chinese firms to delist if they fail to show their audit work papers to American regulators for three consecutive years. That makes Asian alternatives more palatable.
It helps that investors like STAR too. Some offerings have attracted orders amounting to thousands of times the quantum of shares up for sale; some stocks have rocketed tenfold within hours of listing. But STAR is not for the faint-hearted. The prices of shares listed there are sometimes way off those of similar securities listed on more mature markets, hinting that they may be divorced from company fundamentals. The Shanghai price of Semiconductor Manufacturing International Corporation, a chipmaker that raised 53.2bn yuan ($7.6bn) in early July through a dual IPO, is more than three times its Hong Kong price, for example. Such inconsistencies can exist on the way down, as well as on the way up. As investors sell older stocks to pile into the newest and flashiest offerings, prices can slide by double-digit percentages, suggesting the market may not have the liquidity yet to absorb large IPOs in quick succession.
This creates a conundrum for Chinas rulers. Investors positive reaction to STAR may prompt regulators to ease stockmarket rules on other mainland exchanges, leading to more efficient, liquid markets and allowing the government to funnel capital to strategic sectors. But untamed speculation by fickle punters makes bubbles more likely, and the political, PR and financial risks of market crashes rank among the things that keep Chinas masters awake at night. If it proves little else than a fashionable casino, STARs allure could dim fast.
See the rest here:
China's newest technology stock exchange is thriving despite the pandemic - The Economist
- S. Korea to launch $825mn fund to compete with Netflix, YouTube - Business Insider India - June 22nd, 2020 [June 22nd, 2020]
- Boomerangs and Frisbees: The effect of COVID-19 on HR trends - Thomsons Online Benefits - June 22nd, 2020 [June 22nd, 2020]
- Five key questions about Google and Apple's contact tracing system - The Telegraph - June 22nd, 2020 [June 22nd, 2020]
- The Consequences Of Shifting To A Hybrid Work Model - ABCN's Officing Today - June 22nd, 2020 [June 22nd, 2020]
- Big Tech Zeros In on the Virus-Testing Market - The New York Times - June 22nd, 2020 [June 22nd, 2020]
- From now on, we will divide history into before and after this pandemic - The Guardian - June 22nd, 2020 [June 22nd, 2020]
- Patagonia becomes latest company to pull ads from Facebook | TheHill - The Hill - June 22nd, 2020 [June 22nd, 2020]
- Andrew Yang wants people to get paid for data collected by tech giants - The Daily Dot - June 22nd, 2020 [June 22nd, 2020]
- DoF faces uphill battle in taxing tech giants The Manila Times - The Manila Times - June 22nd, 2020 [June 22nd, 2020]
- Juneteenth across the tech world - POLITICO - Politico - June 22nd, 2020 [June 22nd, 2020]
- TikTok joins the EUs Code of Practice on disinformation - TechCrunch - June 22nd, 2020 [June 22nd, 2020]
- For Health Tech Startups, Data Is Their Lifeline Now More Than Ever - Crunchbase News - June 22nd, 2020 [June 22nd, 2020]
- Apples iOS 14 will give users the option to decline app ad tracking - TechCrunch - June 22nd, 2020 [June 22nd, 2020]
- You want diversity, inclusion in tech? Embrace remote work - ZDNet - June 22nd, 2020 [June 22nd, 2020]
- Trump kept these tech giants apart now ones a buy and the other should be avoided - MarketWatch - June 22nd, 2020 [June 22nd, 2020]
- US pulls out of talks to tax tech giants in a blow to Europe's plans - CNBC - June 22nd, 2020 [June 22nd, 2020]
- European Union Seeks to Restrict Tech Giants From Grinding Smaller Competitors WIth Updated Tax and Content Ru - Tech Times - July 11th, 2020 [July 11th, 2020]
- Sequoia Capital Opens Its First Tech Incubation Center in Shanghai - Caixin Global - July 12th, 2020 [July 12th, 2020]
- Indian Govt Wants Tech Giants Google, Amazon And Facebook To Provide Source Code And Algorithms - IndianWeb2.com - July 12th, 2020 [July 12th, 2020]
- Invest NI's Bill Montgomery who helped bring top US tech giants to Northern Ireland steps down - Belfast Telegraph - July 12th, 2020 [July 12th, 2020]
- The Future of Remote Work, According to Startups - Visual Capitalist - July 12th, 2020 [July 12th, 2020]
- 10 big things: TikTok, on the clock - PitchBook News & Analysis - July 12th, 2020 [July 12th, 2020]
- Tiktok and finding the real digital imperialists - The New Indian Express - July 12th, 2020 [July 12th, 2020]
- US slaps French goods with 25% added duties, but delays effective date - Financial World - July 12th, 2020 [July 12th, 2020]
- U.S. targets $1.3-billion in French imports in retaliation for tax on tech giants - The Globe and Mail - July 12th, 2020 [July 12th, 2020]
- Kudos to TikTok, tech brethren; Starbucks & Luckin have us soured on coffee cos. - Compliance Week - July 12th, 2020 [July 12th, 2020]
- Silicon Valley giants have thousands of US military contracts - E&T Magazine - July 12th, 2020 [July 12th, 2020]
- Tech giants: From the basement to world domination - KnowTechie - July 12th, 2020 [July 12th, 2020]
- This Week's Awesome Tech Stories From Around the Web (Through July 11) - Singularity Hub - July 12th, 2020 [July 12th, 2020]
- US tech giants halt Hong Kong police help TechCrunch - July 12th, 2020 [July 12th, 2020]
- Infographic: How the Tech Giants Make Their Billions - July 12th, 2020 [July 12th, 2020]
- facebook: US tech giants face hard choices under Hong Kong ... - July 12th, 2020 [July 12th, 2020]
- FYI: You do all know that America's tech giants, even ... - July 12th, 2020 [July 12th, 2020]
- TikTok ban: Facebook, tech companies benefit from US ... - July 12th, 2020 [July 12th, 2020]
- U.S. Tech Giants Pause Responses To Hong Kong Requests ... - July 12th, 2020 [July 12th, 2020]
- IBM Q2 earnings preview: can the tech giants cloud revenue keep growing? - IG Bank - July 16th, 2020 [July 16th, 2020]
- Buying tech stocks is the most crowded trade in history. - The New York Times - July 16th, 2020 [July 16th, 2020]
- Dow Jones Slumps as Johnson & Johnson Boosts Outlook, Apple and Cisco Stocks Head Lower - Motley Fool - July 16th, 2020 [July 16th, 2020]
- IBM, Verizon team up for 5G effort aiming to accelerate business solutions - WRAL Tech Wire - July 16th, 2020 [July 16th, 2020]
- BREAKING: American Tech Giants Google-Apple Remove Palestine From World Maps, Replace With Israel - India.com - July 16th, 2020 [July 16th, 2020]
- VMware Invests With Other Tech Giants In Digital Assets Series C Round - Forbes - July 16th, 2020 [July 16th, 2020]
- U.S. tariff threat isn't swaying France on taxing tech giants - Accounting Today - July 16th, 2020 [July 16th, 2020]
- Trio of Tech Giants the Latest on Receiving End of BIPA Lawsuits - findBIOMETRICS - July 18th, 2020 [July 18th, 2020]
- G Suite's new unified interface poses an existential threat to Zoom and Slack - Business Insider - July 19th, 2020 [July 19th, 2020]
- India's Jio creates 5G tech in-house, teams with Google on affordable smartphone - FierceWireless - July 19th, 2020 [July 19th, 2020]
- The Twitter Hacks Have to Stop - The Atlantic - July 19th, 2020 [July 19th, 2020]
- Tech giants this country needs YOU! Do your moral duty and stop avoiding tax to help save our economy - The Sun - July 19th, 2020 [July 19th, 2020]
- Apple expands coding partnership with Black schools as tech firms grapple with lack of diversity - USA TODAY - July 19th, 2020 [July 19th, 2020]
- How Huawei landed at the center of global tech tussle - Chicago Daily Herald - July 19th, 2020 [July 19th, 2020]
- Kamala Harris blamed for EVERYTHING as Internet mocks news report 'exposing' her ties to tech giants - MEAWW - July 19th, 2020 [July 19th, 2020]
- Wall Street delivered the 'kind of pullback I've been waiting for,' Jim Cramer says - CNBC - July 19th, 2020 [July 19th, 2020]
- American tech giants Google-Apple remove Palestine from world maps, replace with Israel - Daily Times - July 19th, 2020 [July 19th, 2020]
- Chinese tech giants have tens of billions at stake in India - TechNode - July 19th, 2020 [July 19th, 2020]
- The Streaming Wars Could Become a Battle of Tech Giants. Heres Why. - Barron's - July 19th, 2020 [July 19th, 2020]
- Advertising giants agree to evaluate mutual definition of hate speech - Axios - July 21st, 2020 [July 21st, 2020]
- MPs say tech giants have 'failed to tackle' Covid-19 infodemic and Government must regulate them now - Press Gazette - July 21st, 2020 [July 21st, 2020]
- US Tech Giants trying to survive the Chinese Market - Market Capitalize - July 21st, 2020 [July 21st, 2020]
- China's aggression is undermining its tech giants' global ambitions - Nikkei Asian Review - July 21st, 2020 [July 21st, 2020]
- With Just $130K In Funding, Indias Nimo Planet Is Looking To Challenge Tech Giants With Its Smart Glasses - Inc42 Media - July 21st, 2020 [July 21st, 2020]
- Coronavirus scams (back) in the spotlight - POLITICO - Politico - July 21st, 2020 [July 21st, 2020]
- The background to EU citizens' court win over US tech giants - The Guardian - July 21st, 2020 [July 21st, 2020]
- Heres why BlackRocks bond chief says hes bullish on highflying tech stocks - MarketWatch - July 23rd, 2020 [July 23rd, 2020]
- How buyouts by big tech stifle innovation - Livemint - July 23rd, 2020 [July 23rd, 2020]
- Apple digs in over its App Store fees - BBC News - July 23rd, 2020 [July 23rd, 2020]
- How Spotify and TikTok Beat Their Copycats - Harvard Business Review - July 23rd, 2020 [July 23rd, 2020]
- What does the pandemic mean for the smart city revolution? - TechHQ - July 23rd, 2020 [July 23rd, 2020]
- Cramer says moves in tech stocks are 'truly insane' as Amazon and Tesla climb - CNBC - July 23rd, 2020 [July 23rd, 2020]
- Google has a plan to lure shoppers away from Amazon - CNET - July 23rd, 2020 [July 23rd, 2020]
- Could the pandemic affect our perspective on smart cities? - Tech Wire Asia - July 23rd, 2020 [July 23rd, 2020]
- 11 China-based Suppliers of US Tech Giants Sanctioned Over Alleged Human Rights Abuses vs the Uighur - Tech Times - July 23rd, 2020 [July 23rd, 2020]
- Apple, Google and Sony will be critical to MLB season shortened by coronavirus - CNBC - July 23rd, 2020 [July 23rd, 2020]
- Meet Gaia X Europe's answer to the power of U.S. and Chinese cloud giants - CNBC - July 23rd, 2020 [July 23rd, 2020]
- 5G takes the Senate stage - Politico - July 23rd, 2020 [July 23rd, 2020]
- Typewise taps $1M to build an offline next word prediction engine - TechCrunch - July 23rd, 2020 [July 23rd, 2020]
- Stocks fall to session low, with Dow the dropping 250 points as tech falters - CNBC - July 23rd, 2020 [July 23rd, 2020]
- These 5 tech giants could buy VMware if Dell chooses to sell the software giant, according to analysts: 'VMware would be a valuable property to any... - July 23rd, 2020 [July 23rd, 2020]
- US Congress to question heads of tech giants on Wednesday - Yahoo News - July 25th, 2020 [July 25th, 2020]
- Tech CEO hearing will probably be postponed, sources say - CNBC - July 26th, 2020 [July 26th, 2020]
- Zuckerberg, Bezos, other tech CEOs to testify on competition - WBIR.com - July 26th, 2020 [July 26th, 2020]
- The collapse of tech giant Wirecard triggers national angst in Germany - Marketplace - July 26th, 2020 [July 26th, 2020]