China’s trading venue for science, technology to start on July 22

Initial Public Offering (IPO). Image: DEALSTREETASIA

China’s much-anticipated trading venue for science and technology initial public offerings will start operating this month, less than a year since President Xi Jinping first announced the project.

Companies will begin trading on July 22, the Shanghai Stock Exchange said in a statement on Friday. It added that 25 firms will comprise the first batch.

Styled after the Nasdaq Stock Market, the so-called tech board is seen as key to keeping the next Alibaba Group Holding Ltd. or Xiaomi Corp. from choosing New York or Hong Kong to go public. It’s also a testing ground for a potential new IPO regime: regulators have waived restrictions on how firms are priced when they list, allowed dual-class listings, and offer a more streamlined vetting process.

China must use the tech board to drive reform in the nation’s capital market, Vice Premier Liu He told regulators and global finance professionals at a forum in Shanghai on June 13, urging transparent laws and regulations for the trading venue. Liu also called on policy makers to expand institutional investors’ channels to invest in equities.

More than 100 companies have applied to IPO on the tech board, according to official data.

Qingdao Haier Biomedical Co., Sun Car Insurance Agency Co. and Certusnet Information and Technology Co. have scrapped plans to list in Hong Kong and are expected to debut on the tech board instead.

Bloomberg