China's Nasdaq-style STAR Market is set to attract more foreign investors in the coming quarters, thanks to the launch of its first market benchmark and its growing ability to attract quality tech names with overseas presence, according to leading global financial institutions.

On Thursday, the Shanghai Stock Exchange released real-time data of the SSE STAR Market 50 Index, the first official index gauging market performance of the board, which consists of 50 STAR-listed firms with relatively large capitalization and good liquidity condition.

The launch of the index, named STAR 50 in short, will make the tech board more attractive to foreign investors by providing the key tool of index investing, said Lynda Zhou, chief investment officer for equities in China at Fidelity International, a global asset manager.

Market data indicated that four fund managers are preparing to roll out funds tracking the STAR 50, with experts indicating that the number could rise in the foreseeable future.

The STAR 50 edged down by 0.21 percent to 1494.14 points on Thursday.

More listings by Chinese tech companies with a global presence will help attract overseas participation in the STAR Market, experts said, citing the recent successful debut of chipmaker Semiconductor Manufacturing International Corp and the proposed listing of fintech giant Ant Group.

"More and more first-class, high-growth companies will pursue listing there (the STAR Market), which offers a pool of premium Chinese assets for foreign investors. Many of them also have a global footprint that appeals to foreign investors," said Harry Han, assurance partner at multinational professional services firm EY.

The STAR Market offers foreign investors a unique opportunity to participate in the growth of the world's second-largest economy by being able to invest in some of China's best tech firms, Han said, adding that foreign investors should keep a close watch on the policy developments that facilitate investment in the STAR Market.

Since the STAR Market started trading on July 22 last year, it has seen floats of 140 firms and increased foreign participation, thanks to the registration-based system and other market-oriented reforms that brought the market more in line with global practices, experts said.

According to market tracker Wind Info, overseas institutional investors were shareholders in 16 STAR-listed firms at the end of March this year through the qualified foreign institutional investor program or QFII, up from four by the end of last year.

Several foreign-invested investment banks have sponsored STAR IPOs, data from financial information provider Refinitiv showed, such as those which saw equity participation from institutions like Morgan Stanley, Deutsche Bank, UBS and Goldman Sachs.

"Foreign investment banks such as UBS are well-positioned to participate in the STAR Market which operates more on international and market-oriented practices," said Eugene Qian, chairman of UBS Securities.

Despite the growing foreign participation on the STAR Market, foreign investors and investment banks still played a minor role when compared with their Chinese counterparts, with experts citing hurdles like inability of the STAR Market to be a part of the stock connect programs.

Foreign investors look forward to being allowed to participate in both STAR IPOs and secondary market trading via the Shanghai-Hong Kong Stock Connect, Qian said.

Zhou from Fidelity International expressed concern on the relatively high valuation of STAR-listed firms, which could imply downward pressure as the number of listed firms increases and initial investors of some STAR-listed firms start selling stocks.