Saturday, October 31st 2009 - 01:24 UTC

Spectacular take off for Shenzhen’s ChiNext market for small companies

The price of shares for all 28 firms on China's new Nasdaq-style stock market more than doubled when it opened for trading for the first time on Friday. The ChiNext stock market is designed to attract financing for small to medium sized enterprises.

All shares prices more than doubled on the first day

The 28 listed companies are almost all privately-owned outfits, in contrast with the state-owned firms that dominate China's main stock market.

China is home to 10 million small and mid-sized companies.

Two of the biggest winners were Chengdu Geeya Technology, a digital equipment provider, which saw shares jump by 210%, and film studio Huayi Bros Media which rose by 148%.

The surge in share prices was so dramatic that by the midday break trading had to be temporarily suspended by the Shenzhen Stock Exchange, which hosts the new index.

Six companies on ChiNext are in biotech or pharmaceuticals, and others are in information technology, energy efficiency, telecoms, medical equipment, entertainment and electronics.

The Chinese government has talked for more than a decade about creating a Nasdaq-style market to promote technology and other new industries, but its launch was repeatedly delayed.

Regulators are reviewing more than 100 applications for ChiNext and industry officials estimate that at least 1,000 firms are preparing to float shares on the market next year.

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