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Investors give index a hearty welcome

VENTURE capital and private equity investors welcomed the new Chinese Growth-Enterprise Market, which will probably debut on May 1. The long-awaited board was regarded as another exit channel for investors to reclaim stakes.

"It's definitely a good message for the industry and a milestone in the Chinese capital market," said Zheng Xingguo, research director of Zero2IPO Inc, a Beijing-based investment consulting company.

"We've been waiting for it for a decade, now here it is."

In the past, China's startups, mainly high-tech companies, had to issue initial public offerings on overseas markets such as the Nasdaq, or on Singapore's or Hong Kong's growth board, because they couldn't meet the main board requirements on the Chinese mainland.

Last year, Chinese firms raised US$21.83 billion through IPOs, a 79.2-percent drop from the year before, and a three-year-low, according to Zero2IPO.

Bao Fan, chairman and chief executive of financial consulting firm China Renaissance, also welcomed the new board.

"In the long term, it will attract not only domestic firms but overseas-registered Chinese firms. In this tough environment, China's capital liquidity will make them return to be listed on the mainland market," Bao said.

VC firms will benefit directly from the new policy as the invested firms are able to float shares in the domestic market, which is relatively stable.

Comparatively, PE firms often choose large-scale enterprises, which can list on the main boards, according to industry officials.


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