Here’s proof that if you close one market, another one opens in its place.
A long way from the embattled Shanghai and Shenzhen exchanges, a tiny bourse dubbed the New Third Board (NTB) appears to be growing, and how, according to Reuters.
While its larger peers remain barred from holding IPOs, the exchange, set up three years ago in Beijing for small and medium-sized companies, is listing companies at a break-neck speed.
From the beginning of the year through June, 577 companies raised nearly $5 billion through the NTB, while 362 more listed since July 3. Another 827 are currently lined up hoping to raise over $9 billion – more than double the 329 the exchange listed in 2014.
It isn’t for everyone though, as an over-the-counter market, its only open to professional investors and volatility can get pretty insane – 100% three-month moves both ways are not out of the ordinary.
Still, everyone seems to love it, as Reuters reports:
“Everybody talks about it in a very positive way, because they think the Third Board probably will correct the deficiencies in the other boards,” said Victor Wang, co-founder of ZhenFund, which is focussed on seed financing for startups and has invested in more than 250 companies.
“The Chinese stock market is now much different from the year when we decided to list in the U.S. The biggest difference now is the New Third Board,” said Raymond Huang, senior director of Investor Relations at AirMedia Group Inc (AMCN.O), which is considering to list in China.
“All these will make it more possible for the listing of growth enterprises, especially Internet companies, that have not generated profit yet.”
Photo: ILO in Asia and the Pacific