Hopes for investment boom give big boost to blockchain-related stocks

By Ma Jingjing Source:Global Times Published: 2019/10/28 12:08:39

File photo: IC

Dozens of Chinese blockchain technology-related companies listed on the A-share market closed up by the 10-percent daily limit on Monday amid expectations that more capital would flow into the sector following an official endorsement.

Feitian Technologies Co, a supplier of smart-card-based security solutions and products, closed at 14.85 yuan ($2.10). The company earlier said it had released equipment for the safe storage of blockchain-based digital currencies.

Shunya International Martech Beijing, an integrated communications company, closed at 18.92 yuan. In September, Shunya announced that one of its subsidiaries specialized in the application of blockchain technology in the real economy, including supply chain finance, smart ports and blockchain-based food traceability management.

Bitcoin's price stood at $9,384.77 as of press time, up roughly 17 percent from Friday, data from Coindesk showed.

Chinese President Xi Jinping has urged increased efforts to speed up development in this sector, underscoring the important role of blockchain technology in the new round of technological innovation and industrial transformation.

In response to the news, Shenzhen Xunlei Networking Technologies Co soared 107.76 percent to $4.82 on Friday (US time), a record gain since its listing on the Nasdaq in 2014.

In October 2017, Xunlei announced it was transitioning from an online services provider into a blockchain company, and it released a blockchain-based product named OneThing Cloud.

Other companies, including Beijing Certificate Authority Co, IT solutions provider Yusys Technologies Co and cryptography technology-based information security equipment provider Westone Information Industry Inc, all soared by the daily limit on Monday.

The Chinese president's endorsement of the technology is expected to enhance the market's appetite for blockchain shares and boost investment, said Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co.

"But application of the technology still has a long way to ago. We need to watch carefully to see if these public companies really implement the national policy and invest in research and applications," Yang told the Global Times.

Li Wei, director of the Science and Technology Department of the People's Bank of China, the country's central bank, called for an in-depth study of blockchain technology during the Bund Summit in Shanghai on Monday.

Blockchain has great potential to boost digital innovation, he said. "We need to promote the deep integration of blockchain and the real economy to resolve problems like small businesses having difficulty in obtaining loans, banks having difficulty in risk control and government agencies having difficulty in supervision," he said.

On October 24, Zhongguancun Science Park said that it would offer subsidies for research and development conducted by 2,920 small technology companies. This group includes dozens of blockchain-related enterprises such as innovative blockchain platform ASCH, one-stop blockchain technology service provider Chinaup and Oracle Chain. 

Details about the subsidies haven't been released yet.


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