Friday marked the first day of GEM Board share subscription, and the high-priced valuations did not dent enthusiasm. Both individual and institutional, are showing keen interest. But most say they will be conservative in trading.
At one securities company in Beijing, the GEM Board's new-share subscription business is red hot. In just one early-morning hour, the firm has received more than two-thousand orders from individual investors.
One investor of GEM board said "I plan to subscribe to one single share with my capital."
It's not just individual investors. Mutual funds are also taking an active approach. Through Thursday, nearly 300 mutual funds had confirmed their GEM Board trade intentions. But even if they subscribed to all the new shares, that would only account for 4.8 million yuan. This is a small amount of mutual fund capital, so the investments won't affect their overall performances. Indeed, most are eagerly eyeing the growth potential of these chips.
Xia Chun, GM of Research Department of Bosera Funds said "One important point is that, in the initial stage of the GEM Board, many sides are chasing it. So I think the price will go beyond its fundamental value for a considerable length of time."
Surveys show that many investors are banking on "stag profits," the strategy of betting that new shares will surge on their debut, and then selling the stocks for quick gains on the first day of trading.
(CCTV September 28, 2009)
