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China has just recently launched its brand new Growth Enterprise Market, a Nasdaq-style stock market that has been over 10 years in the making. Twenty eight small- and medium-sized companies will be debuting on the Gem as it is called, made to attract financing of new high growth industries. These industries include software companies, pharmaceutical firms and creative industries. But investing in these companies will be risky business, since there will less than 30 companies to begin with.
The stock exchange will most likely go through some rough periods given its size. It will be very open to volatility. It will be interesting to see with the cost of equity being so high, if the higher return expected will be given. It may take a while for this exchange to compete with the markets in New York or Hong Kong, but it has the potential. Right now there are very few opportunities and options to invest in China, so the future is there. If you are willing to take the plunge and invest, you may be rewarded very highly.
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