Companies that are trading on the main Red China OTC equity market place are turning to the long-awaited tech board that is fix to work just like the NASDAQ. Shanghai’sec Science & Technology Innovation board that is gear up to launch inwards the side by side few months.
It has attracted four major companies that include Jiangxi JDL Environmental Protection Co., in addition to Jiangsu Beiren Robot System Co. These companies have defected from Beijing’s New Third Board as well as applied for a listing on the new tech board. In the coming months, we are expecting to come across more than companies shifting to the novel tech board.
Capital Market Reform
This electric current trend of companies defecting is undermining the potential of the new tech board in Shanghai, which is considered past approximately economists every bit the virtually pregnant reform to striking the uppercase markets inward PRC.
Now, every bit property managers are launching novel tech board funds, retail investors are rushing to open up upward trading accounts. But 1 of the get-go warnings by economists is that the novel uppercase market place being introduced is going to follow the boom-bust wheel that the OTC board experienced before on alongside the existing New Third Board.
After the successful launch of the New Third board inwards 2013, the market place became a ghost town because companies that were expected to listing never listed; the New Third Board never took off every bit anticipated.
It is at once estimated that 428 of the x,407 companies that are listed inward the New Third Board tin shift to the new tech board. One of the disadvantages of the novel tech board is that it is not open up to the world, too this makes it a low liquidity market place.
On the other mitt, ane reward of the novel tech board is that it has tardily registration listing procedures that assist startups that accept nevertheless to brand a earnings inwards other markets to appear on the list.
The novel reform that is taking place in Shanghai is as well adding pressure to the startup board inward Shenzhen called ChiNext. This startup board wants to adopt the novel registration arrangement to arrive easier for startup companies to list inwards the market.
But the job is that at that place is lots of contest betwixt unlike markets that are adopting the new registration procedures. It is instantly tough for companies to stick to their master list because other markets are offering easy to register procedures.
But all inward all, there are mixed feelings nigh what is taking place inwards Shanghai’sec new tech board. As we mentioned before, when the New Third Board was in its inception stage, it attracted lots of excitement, merely it never lived upward to the hype. The same trend is what about people fright volition happen to the novel tech board.