China to set up new stock-trading venue for high-tech firms

Bloomberg

China will set up a new trading venue in Shanghai that will make it easier for high-tech companies to access funding, as President Xi Jinping vows more opening measures to boost the world’s second-largest economy.
The Shanghai Stock Exchange will also start a pilot programme on a registration-based system of initial public offerings, Xi said at the opening ceremony of the China International Import Expo on Monday, without elaborating on either initiative.
China is expanding efforts to keep its most promising companies from going public in Hong Kong or the US.
Officials were studying a possible new trading venue in Shanghai that would have lower thresholds for biotechnology and high-tech firms, people with knowledge of the matter said in June.
The new market, which might waive earnings and revenue requirements, would operate at the Shanghai Stock Exchange, and could open as early as next year, the people said at the time.
“There was little or no anticipation of something like this, and so the reaction in the community so far is quite muted or calm,” said Tom Wang, portfolio manager at Shenzhen Qianhai Youjoy Capital Management.
“There are no details on the supporting policies, but to take it at face value, it may mean allowing loss-making companies to go public.”
Lawmakers in 2015 granted the China Securities Regulatory Commission a two-year window to install a registration-based system for IPOs, which would end CSRC intervention in pricing and allow companies to go public quicker.