Individual investors monitor share prices at a stock exchange in Nanjing, East China's Jiangsu Province on Tuesday. Photo: IC

In the first month of operations for the science and technology board, the 28 initial listings have seen their share prices surge by an average of 171 percent from the IPO level. Experts said the gains show that domestic investors have an appetite for such assets that can't be satisfied yet due to the limited number of companies and tradable shares. 

Turnover reached 585 billion yuan ($82.7 billion) in the first month, equal to 13.8 percent of the total turnover on the Shanghai market, data released by the Shanghai Stock Exchange showed. 

The turnover ratio on the new board was high at 78 percent on the first trading day, but it declined and stabilized at 10-15 percent at present, the Shanghai Stock Exchange data showed. In comparison, the average daily turnover ratio on the A-share markets was only 0.74 percent in 2018, according to domestic media reports. 

Dong Dengxin, director of the Financial Securities Institute at the Wuhan University of Science and Technology, said that the turnover ratio on the new board was "a little too high, reflecting a supply-demand imbalance." 

"Investors have strong demand for the new tech board, but the exchange has few listings and the free float is limited," Dong told the Global Times on Thursday. 

He suggested that the government should expand the new board more quickly. "At least three to five new companies should be listed on the science and technology innovation board each week," he said. 

"An efficient IPO verification mechanism should also be guaranteed, and the Shanghai Stock Exchange should have a more inclusive mindset about companies' IPO applications for the new sci-tech board. The board needs a 'size effect'," Dong said. 

But Dong and other experts agreed that so far, market response has been within expectations. 

"The operation of the science and technology innovation board in the first month did not exceed my expectations...the overall increase in the first month showed that the pricing mechanism was reasonable," Xi Junyang, a financial economist at the Shanghai University of Finance and Economics, told the Global Times on Thursday.

A statement released by the Shanghai Stock Exchange said that market fluctuations had been "within the expected range" considering individual stocks' performances on the new board. It also noted that except for the first trading day, only two stocks had triggered temporary trading halts. 

Since the listing standards of the new board are looser than other major boards, a more stringent post-supervision system, including information disclosure regulations, is required, Xi noted.

The statement released by the Shanghai Stock Exchange also showed that despite high investment enthusiasm, most investors had complied with investment rules. Eight abnormal transactions were discovered including moves to push down stock prices and false declarations, it noted.