On the second day of trading, China’s STAR Market has taken a dive 24 hours after it debut on the Shanghai Stock Exchange.
The STAR Market was China’s answer to compete the Nasdaq, the world’s largest and most preferred exchange for technology listing.
According to a Reuters report, 24 out of 25 companies on the Shanghai Stock Exchange’s STAR Market opened lower, by the midday break four companies managed to post gains, led by Espressif Systems (Shanghai) Co., a maker of wireless communication chips, which jumped 15.1%.
One of the largest listed stock, China Railway Signal & Communication Corp posted the sharpest decline of the morning session, falling 16.1% by the midday break, having earlier fallen nearly 22%. The company’s shares remain 76% higher than their initial public offer price.
Yuan Yuwei, fund manager at Olympus Hedge Fund Investments Co, told Reuters that STAR Market valuations could remain frothy in the short term, but that he expected to see declines over the next two to four weeks. On Monday, stocks posted average gains of 140%.