High-tech Boards to Open Soon

China's planned high-tech boards on its securities market - the equity market which is similar to the Growth Enterprises Market (GEM) in Hong Kong - are expected to be launched on June 1 in Shanghai and Shenzhen stock exchanges, according to sources close to the top securities regulators.

Over 70 high-tech firms have already been granted approval for the new market by the top regulating authorities - the Chinese Securities Regulatory Commission (CSRC) - including a number of Shanghai-based technology firms, said Fan Yongjin, president of the Shanghai Asset Reshuffling Leading Group Office for the Local Listed Firms.

The office is now in charge of recommending and selecting qualified local high-tech firms that intend to seek funds from the planned equity market.

"The total number of those would-be listed firms could be extended to 200 to 300 during the first stage of the boards," said Fan.

A hefty increase in numbers is likely as the boards continue to expand and more firms emerge on the home market.

Rumours prevailed in the market that there are still over 1,000 firms waiting for evaluation by the Ministry of Science and Technology and the Chinese Academy of Sciences - two of the major watchdogs that are authorized to grant the title of high-tech firms.

And only those firms that successfully pass the appraisal of these two institutions can apply for listing on the boards.

China has made repeated calls for the development of the country's high-tech companies, which largely enjoy favourable taxation conditions but face tough funding shortfalls.

To ease the problem of financing the growth of these firms, the State has adopted many favourable policies to stimulate the industry, including the launch of State-backed venture capitals, the introduction of foreign venture capitals and the inauguration of the high-tech boards at Shanghai and Shenzhen Stock Exchanges.

And the government has also promised to minimize the qualifications for the high-tech companies that intend to be listed on the boards, according to Fan.

Technology companies aiming to list on the new boards must first have a minimal two year-long history and record profits for one year, compared with three years of profits for other firms seeking listing on the main board.

And the minimum registered capital for the high-tech board firms has also been reduced to 30 million yuan (US$3.62 million), compared with that of 50 million (US$6.04 million) for other firms.

(Source: CIEC)

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