The A, B, H of Chinese stocks

Article Excerpt

China has the second-largest stock market in the world and a quoted value of all stocks in excess of $7 trillion. This compares with $28 trillion for the U.S. market and $1.7 trillion for the Canadian market. The Chinese equity markets are composed of a domestic and an offshore market. The Shanghai Stock Exchange and the Shenzhen Stock Exchange are the two exchanges operating in Mainland China. The majority of Chinese stocks are listed on these exchanges and are generally known as China A shares. A shares constitute the country’s domestic market, and are both quoted and traded in yuan. Their availability is mostly limited to domestic investors. In addition, there is an offshore market for Chinese companies that choose to list their shares on the Hong Kong Stock Exchange. These are called H shares and are quoted and traded in Hong Kong dollars. Many companies float their shares simultaneously on the Hong Kong market and one of the two Mainland exchanges…

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