Ups and downs for enterprise board
- Source: Global Times
- [23:43 November 01 2009]
- Comments
People take pictures during a ceremony to mark the opening of the GEB in Shenzhen. The ceremony welcomed the first group of companies to be listed on the board. Photo: CFP
By Cong Mu in Shanghai
Experts attending an innovation forum in Shanghai Sunday expressed both hopefulness and concerns at the country's newly launched growth enterprise board (GEB), or ChiNext, on the Shenzhen Stock Exchange.
Venture capitalists, entrepreneurs and scholars said on the sidelines of the forum held at China Europe International Business School (CEIBS) said that the GEB, which saw stock prices nearly doubling on their first trading day Friday, will fluctuate in the near term.
Shao Jun, founding partner of DT Capital Partners, worried that the investors have a tendency to speculate on start-up concept stocks, which will divert share prices too much away from the fundamentals, eventually hurting market sentiment.
Li Yu, CEO of Shanda Games, called people to have patience with GEB's development. Shanda, a new spin-off that was listed on Nasdaq September 25, saw its share price continuously falling since its debut, down 7 percent Friday. However, Li said she believes long-term investors will stay with her company based on solid fundamentals.
There are currently 116 Chinese listed companies on Nasdaq, including Baidu, Nasdaq's largest listed company in China, according to a statement by the market operator.
In comparison, 28 stocks were trading on ChiNext, with a market capitalization of 25 billion yuan ($3.66 billion) Friday. The average price/earning ratio of the market was 111 times.
"It's probably a fairly immature market. I would expect it to be a volatile market for a while because it's new," Nobel laureate Mike Spence told the Global Times on the sidelines of another forum in CEIBS.
