STAR Market and IPO system hitting on all cylinders

China's efforts to develop the SSE STAR Market and a registration-based initial public offering (IPO) system have yielded a bumper harvest measuring up to expectations.

Today at the 13th Lujiazui Forum, Yi Huiman, chairman of the China Securities Regulatory Commission, said the STAR Market has proved its role in fostering science-technology enterprises with core technologies in key fields.

The STAR Market, first launched at the 11th Lujiazui Forum two years ago, had 282 sci-tech companies listed on the board at the end of May, with a total market value of nearly 4.1 trillion yuan (US$640 billion). 

STAR-listed companies have raised 361.5 billion yuan in IPOs, equivalent to more than 40 percent of the overall funds raised in A-share IPOs in the same period.

Last year's data showed that in STAR-listed firms, research and development personnel accounted for an average of 28.6 percent of the total number of employees. These companies also hold an average of about 104 invention patents each, higher than those listed on other boards.

The Nasdaq-style board includes many innovation enterprises specializing in fields such as integrated circuits, biomedicine and high-end equipment manufacturing.

In 2020, net profit of STAR-listed companies surged 59 percent from a year earlier, significantly higher than the overall level of the whole market, Yi said.

Yi also responded to recent stories of tightening IPO regulations, saying "in our view, IPO regulations have neither tightened nor loosened."

But issuance surely requires comprehensive consideration of market capacity, liquidity environment and the coordinated development of primary and secondary markets, with an aim to actively create an IPO ecology in line with market expectations, he said.

On giving better play to the hedging function of commodity futures, Yi called on international institutions to establish a more rigorous and scientific index-compiling mechanism, enhance the transparency and binding force of quotations and jointly improve the efficiency of commodity price discovery.

These measures will help improve the maintenance, stability and security of global industrial and supply chains, he said.