China launches much anticipated stock exchange for local tech IPOs, causes circuit breaker trip

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china stock exchange

Focusing on internal economics, China today launched its own stock exchange, which experts have called similar to the U.S. NASDAQ.

It’s a big day.

“The raucous first day of trade tripped the exchange’s circuit breakers that are designed to calm frenzied activity,” reported Andrew Galbraith and Samuel Shen at Reuters. “The weakest performer leapt 84.22%. In total, the day saw the creation of around 305 billion yuan ($44.3 billion) in new market capitalization on top of an initial market cap of around 225 billion yuan, according to Reuters’ calculations.”



China stock exchange ramps up interest

Although volatility is often muted in Chinese equities, one of the listed stocks, semiconductor firm Anji Microelectronics Technology, has gone up over 500% on the first day.

Experts note China wants to build on the success of its e-commerce platforms like Tencent and AliBaba, but the national exchange can also be seen as a return volley in the spiraling US/China trade conflict.

With American sentiments so bellicose toward Chinese trade, it can be seen as a self-protective move for the Chinese to start building out their own domestic stock market.

At the same time, abortive efforts to ban Chinese telecom provider Huawei from doing business with American chip firms shows that protectionism largely fails in the global economy.

The STAR market, as it’s called, has an impressive roster, and investors are likely to point to the continued operation of this elite index as part of China’s emerging market power.

“The lowest performer today clocked in at … 84%.” said Sherisse Pham at CNN, reporting on the emergent platform.

Looking at differences between STAR and what has gone before, Pham cited looser price restrictions and issuer control.

“We’ve got no limit, no cap on stock prices for the first five days.” Pham said. “It gives issuers control over price and timing.

Watch China’s progress on this brand-new exchange as it consolidates its place in the global economy itself.

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