Posted by: Bruce Einhorn on September 29, 2009
For a decade, Chinese officials have been talking about launching a Nasdaq-style market catering to small and mid-sized companies. The wait is almost over. Next month - after the week-long holiday marking the 60th anniversary of the People’s Republic - the Shenzhen Stock Exchange is going to launch its Growth Enterprise Market, or GEM. Hard to believe that someone didn’t point out to the folks in Shenzhen, though, that the GEM brand is pretty tarnished: Hong Kong has a ten-year-old GEM, also targeted at smaller companies that couldn’t list on the main board. Hong Kong’s GEM got a lot of hype when it first launched - and has languished in obscurity ever since.
It makes you wonder who’s in charge. I sometimes get frustrated in Hong Kong and mainland China with poorly translated signs in airports, train stations and other public places: Here the government has spent a ton of money building really impressive infrastructure, yet nobody thought to spend a tiny bit to get a native English speaker to make sure the translated signs make sense. Not a huge problem, but embarrassing. Shenzhen’s GEM is a bit similar. Here’s a plan that has been in the works for years and years. You would think somebody would have bothered to check if the name GEM was already taken, and if so, what sort of reputation it had. Now Shenzhen’s new Nasdaq-style market is saddled with a lousy name. That’s not a fatal problem, but it will make the already-difficult task of winning investor confidence that much harder.