Battle of the bourses

Article Abstract:

The Shenzhen stock exchange, David to Shanghai's Goliath, is trouncing the giant. Shenzhen's B-shares, stocks reserved for foreigners but widely traded by Chinese investors, grew from $663 million to $1.4 billion in 18 months, overtaking Shanghai's $1.3 billion. Unlike Shanghai, Shenzhen seeks out and courts promising companies, achieves listing more rapidly, and communicates freely and frequently with brokers. The result: stronger companies, a B-share index that rose 52% this year compared with Shanghai's 6%, and an A-share index that rose 114% compared with Shanghai's 45%.

Economic aspects, Shenzhen, China

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Field of dreams: can Shanghai re-emerge as a key financial centre?

Article Abstract:

Shanghai holds enormous promise as a financial center and will almost certainly one day dominate China's markets, but much remains to be done and many obstacles still await. The market still lacks quality listed companies, a securities law and related regulations, a convertible renminbi, and options and derivative instruments. Though bank branches in Shanghai are among the country's most profitable, most national and international banks are basing their China operations in Beijing. Bureaucracy remains a problem.

Financial markets

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Never mind the rules: Chinese set to stay in 'foreigners-only markets

Article Abstract:

China's law restrict foreigners to trading hard-currency stocks known as B shares. The renminbi-denominated A shares are reserved for the Chinese. However local participation was the largest factor in the rally of B shares in 1996, and this is expected to become a permanent feature of the B share market. Beijing is expected to merge the A and B share markets over the next three to five years and foreign investors and fund managers will have to understand the behaviour of Chinese players.

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