Changes on the Exchanges

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Recent reports in official media note that China’s US dollar-denominated B-share markets, originally set up for overseas investors (but also open to locals since 2001), is to be merged into the A-share markets. The A-share markets are already open to qualified foreign institutional investors (QFIIs). The move is expected to take place after completion of share reforms, that will allow State shares to be floated on the A-share markets, later this year.

In another reforming move, China is also reported to be planning a new exchange for trading of financial futures such as stock-index and interest-rate futures and, eventually, foreign exchange. The new exchange is likely to be based in Shanghai, and will be in addition to the existing exchanges: two stock exchanges (in Shanghai and Shenzhen), and three futures exchanges for commodities (in Shanghai, Dalian and Zhengzhou).

In the meantime, the biggest and best Chinese companies are still heading overseas for their listings usually Hong Kong, New York or London. The planned IPO for Bank of China is just the latest in a long list of foreign listings that have annoyed local investors. However, the current reforms, if combined with better governance and financial reporting, make the future for the local markets start to look a little brighter.

China Business Services can provide information, risk management services, and practical assistance to investors in China’s financial markets. We have access to a comprehensive database of Chinese listed companies, including historical performance. Please contact us for more details.

See related news:

    China’s A-share, B-share markets set to be merged: reportXinhua – China
    15 (Xinhuanet) — China’s increasingly marginalized B-share markets, where share prices are denominated in US dollars and which are available to overseas …

    China ‘plans financial futures exchange’Sydney Morning Herald – Sydney,New South Wales,Australia
    China plans to establish a new exchange to trade financial futures in the latest step in the modernisation of the country’s financial markets, senior industry …

    Where China’s Top IPOs List: OffshoreBusinessWeek – USA
    Pity the poor mainland investor. The only two viable options for stock investing in China are the notoriously dodgy bourses in Shanghai and Shenzhen. …

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