- China has launched a new stock market for homegrown technology companies called as Science and Technology Innovation Board or STAR Market.The market is modelled after a NASDAQ system.
- According to the regulations,red-chip companies which means Chinese based firms incorporated and listed outside China are allowed to be listed on the STAR market.
- The STAR Market is different as it has more lenient standards for profitability and price volatility than the main exchanges.It permits companies to list before they have earned a profit.Investors are allowed to short-sell individual stocks for the first time in mainland China.
- The STAR Market is seen as a move to keep Chinese tech firms from listing in stock markets abroad.The country has been home to high-profile companies like Alibaba, Tencent, Xiaomi, and JD.com.
- But due to stringent profitability requirements at home,they have chosen to list in New York City or Hong Kong.By providing a low barrier for entry, the development seeks to incentivize Chinese technology companies to list on home stock markets.
- The Nasdaq is an American stock exchange.It is the second-largest stock exchange in the world by market capitalization behind only the New York Stock Exchange.
