STAR Market shines bright after three years, notching over 5 trillion yuan in value

The Shanghai Stock Exchange's STAR Market approached its third anniversary on Friday with some remarkable achievements, including an overall market value exceeding 5 trillion yuan.

By the closing bell on July 21, the Nasdaq-style board on the Shanghai bourse had hosted 437 listed companies worth a total of 5.76 trillion yuan (US$851.3 billion) in market value.

So far this year 60 companies have gone public on the board, with a combined market cap topping 963.1 billion yuan.

As a "home team" in a certain sense, Shanghai-based companies are holding a firm place on the STAR Market. The 65 Shanghai companies listed on the board account for 15 percent of the national total, and have together raised 181.2 billion yuan to post an overall value of 1.29 trillion yuan.

The city has led the nation in both the amount of funds raised by local STAR-listed firms and their combined market cap, while ranked third in the number of companies on the board.

Among all STAR-listed firms, Shanghai has posted 33 companies with market capitalization of over 10 billion yuan and six companies worth over 50 billion yuan.

Semiconductor Manufacturing International Corporation, or SMIC, is currently the largest STAR-listed firm in terms of market value, worth 165.9 billion yuan.

As for key industries in Shanghai, STAR companies in the city mainly focus on new-generation information technology, biomedicine, and new materials. The median of R&D expenditure-to-revenue ratio was 11 percent in 2021.

"Hard technology," or advanced technologies and strategic emerging industries, have become a major feature of the STAR Market, the Shanghai bourse said.

Also of note, since its launch on July 22, 2019, the tech-heavy board has gradually grown into a testing ground for systematic breakthroughs in the capital market, with various innovations and upgrades of systems taken step by step.

In a recent example, China's securities regulator in January announced that a pilot market-making scheme would be launched on the STAR Market in a bid to deepen reforms and improve liquidity, allowing qualified brokerages to act as market-makers on the board.

Detailed regulations and guidelines were then released by China Securities Regulatory Commission and the Shanghai bourse respectively in May and July.

The board is also garnering increasing international attention. As of the end of June, 12 funds tracking the STAR 50 index have been listed in overseas regions, including the United States, the United Kingdom, Japan and Thailand, with a combined management scale of approximately 3.1 billion yuan, indicating a gradually rising international influence and recognition.

The channels for foreign investors to take part in the market, meanwhile, have been further enriched over the past three years. Three major international indices, namely MSCI, FTSE and S&P, have included more and more stocks listed on the board, while more than 50 STAR stocks have been included in the Stock Connect scheme.

In addition, overseas investors can also have full participation in STAR trading via the QFII/RQFII mechanism, including various transactions on both the primary market and secondary market.