China stock euphoria lifts IPO to record 924% first-day gain

The frenzied trading comes as stock volume and prices have been rising quickly in China. PHOTO: REUTERS

SHANGHAI (BLOOMBERG) - A Chinese initial public offering soared tenfold on its trading debut on Thursday (July 9), the latest sign of euphoria in the nation's US$9.3 trillion (S$12.9 trillion) stock market.

QuantumCTek Co., which develops information security products, closed 924 per cent above its 36.18 yuan (S$7.20) issue price on China's Star board. That exceeded the previous record of a 614 per cent first-day jump, posted just on Tuesday by Tinavi Medical Technologies Co. On Wednesday, Geovis Technology Co. climbed 438 per cent in its debut.

The Star board, which will celebrate its first birthday later this month, has no limits on price moves for a stock's first five days of trading. There's a 44 per cent limit for the rest of China's market on the first day and 10 per cent thereafter.

The frenzied trading comes as stock volume and prices have been rising quickly in China. The market has added more than US$1 trillion of value since June 30, outpacing gains in everywhere else globally, and Chinese investors' margin financing is rising at the fastest pace since 2015.

Chinese stocks extended gains on Thursday, with the benchmark Shanghai Composite Index rising 1.4 per cent to its highest since February 2018.

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