Monthly performance of the SSE STAR Market 50 Component Index China 2020-2024
The Star 50 index value at the Shanghai Stock Exchange in China at the end of February 2024 was 808 points. Since its base date in December 2019, the index at its peak had increased in value by more than 50 percent and had made its most significant gains after March 2020. The Star 50 index was dominated by the information technology industry and the pharmaceutical industry, including Beijing Kingsoft Office, Advanced Micro, and Haier Biometrical.
A new milestone
The Shanghai Stock Exchange introduced the Star 50 index at the end of July 2020 which was a significant step in constructing the trading board. Created in July 2019, the Star Market targeted tech-startups by having a more lenient listing process compared to other markets in China. For instance, companies did not have to be profitable and they did not require approval from government regulators. Instead, companies applied via a registration-style process, overseen by the stock exchange itself. Therefore, it could provide young companies easier access to capital and facilitate their growth. Finally, the introduction of a stock index allowed investors to monitor and assess the performance of the board. The Star 50 index tracked the performance of the 50 biggest companies traded on the Star Market.
Facilitating self-reliance
Under the ongoing decoupling of the United States and China, policymakers in Beijing strived to have independent, domestic capital markets that were attractive enough to Chinese tech companies to list at home rather than overseas. Therefore, the Shanghai Stock Exchange copied the registration-style listing process from the NASDAQ as well as lowered the listing requirements. By mid-2020, the Star Market had the second most IPOs in the first half of the year behind the NASDAQ. The board also outperformed all other domestic markets regarding listings. 54 companies successfully listed on the Star A, compared to 29 IPOs on Shanghai’s main board, 36 IPOs on Shenzhen’s SME board, and 17 at Shenzhen’s ChiNext board. In addition to that, the Star Market succeeded in attracting companies from high-tech industries, whereas the largest share of companies on the ChiNext board was from the manufacturing industry.
