China stocks end higher as new start-up listings surge on reforms cheer
- 24 Aug 2020
China stocks closed higher on Monday, with strength seen in the tech-heavy start-up board ChiNext, as investors cheered Beijing's continued market reforms to foster its tech strength.
The blue-chip CSI300 index rose 0.8% to 4,755.85, while the Shanghai Composite Index added 0.2%to 3,385.64. ChiNext ended 2% higher, while the STAR50 index inched up 0.2%.
Shares of 18 companies surged on their ChiNext debut on Monday, kicking off a historic reform that will see Shenzhen officially challenge Shanghai for tech listings, while adding fuel to a "technology war" with the United States.
Leading the gains, Contec Medical Systems soared more than 1,000%, followed by Ningbo KBE Electrical Technology which surged 743%.
Based on Shanghai's year-old STAR Market, the broadening IPO reform will help strengthen Chinese markets' appeal at a time when the country's tech firms face growing U.S. scrutiny and risks of being delisted from U.S. markets.
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"There could be major changes in investor behaviour and the way of thinking due to the new trading system and IPO system, which could prompt the regulators to attach more importance to regulations," said Hu Yunlong, chief investment officer at Beijing Kaixing Asset Management Company.
"For the long term, the registration-based IPO system is an inevitable part of the market's institutional arrangements, whose advantages outweigh disadvantages and which could help enhance value-investing philosophy by directing resources to more quality assets," he added.
Around the region, MSCI's Asia ex-Japan stock index was firmer by 1.02%, while Japan's Nikkei index closed up 0.28%.
At 0717 GMT, the yuan was quoted at 6.9169 per U.S. dollar, 0.03% firmer than the previous close of 6.919.
As of 0718 GMT, China's A-shares were trading at a premium of 36.52% over the Hong Kong-listed H-shares.
Reuters