China’s new NASDAQ-style market saw a week of wild swings as frenzied investors sent the start-up shares to “ridiculously” high levels, analysts said, warning that a correction is on the cards.
The 28 stocks on the ChiNext board in the southern boomtown of Shenzhen repeatedly tripped circuit-breakers in place to curb rampant speculation as keen buyers ignored warnings from regulators to trade in a “rational” way.
After a massive debut surge for all shares on Oct. 30, with some soaring as much as 210 percent amid feverish buying, subsequent sessions saw stocks see-sawing up and down by the 10 percent limit in place on all Chinese bourses.
PHOTO: AFP
“I think it was crazy — the rise was ridiculously high,” said Peter Lai (黎永良), a director of DBS Vickers in Hong Kong. “Chinese investors are not very rational.”
Yan Li, a Beijing-based analyst at Southwest Securities, said the casino-style trading “shows that investors lack an understanding of the risks.”
“Traditionally Chinese investors tend to chase after new stocks and such a trend will continue. I think the ChiNext board is very likely to see big fluctuations in the future,” Yan said.
Ahead of the start of ChiNext trade, the chairman of the China Securities Regulatory Commission, Shang Fulin (尚福林), cautioned investors by saying start-up stocks have potential for strong growth — but also unstable financial results.
The board is expected to give small and medium-sized companies access to financing and to encourage private equity firms and venture capitalists to back start-ups, in the tradition of New York’s NASDAQ.
The first 28 companies to list on the board, ranging from movie producers to medical equipment makers, raised about 16 billion yuan (US$2.3 billion) in their initial public offerings — more than double initial forecasts.
Observers had been worried that ChiNext would draw funds away from the main boards and depress share prices. But so far, the second board appears to have had little impact on main board trading.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS