Chinese companies look to leave OTC market for new tech board in Shanghai
Mar 14, 2019 (China Knowledge) - An increasing number of companies which are currently trading on China’s over-the-counter (OTC) equity market are moving towards the upcoming Nasdaq-style technology board in Shanghai.
Four companies have now decided to delist on Beijing’s New Third Board and apply for a listing on the Shanghai Science and Technology Innovation Board which is expected to be launched within the next few months. More companies are expected to follow soon.
The current desertions highlight the potential for disruption the Shanghai tech board brings which includes some of the greatest reforms in the country’s capital markets.
Even as asset managers and retail traders rush to launch funds on the tech board and open trading accounts, there is the fear that the Shanghai tech board may just follow in the footsteps of the OTC board and turn lifeless after the initial hype.
Trading volume is minimal on the New Third Board and the market provides little financing help for companies listed there. For companies currently listed there which needs fresh capital to grow, a listing on the new board provides a way for these companies to raise fresh capital.
Over 400 of the companies currently listed on the New Third Board are qualified to list on the new tech board and these companies may look to list there.
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