China may merge A-share, B-share markets
Updated: 2006-01-16 08:15
China's increasingly marginalized B-share markets, where share prices are
denominated in U.S. dollars and which are available to overseas investors, are
set to be merged into the country's A-share market, experts said.
The B-share markets, originally designed for overseas investors but
opened to domestic investors since 2001, have been increasingly marginalized as
many overseas investors fled them after domestic investors entered the market.
The A-share markets on Shanghai and Shenzhen stock exchanges are open to
domestic investors and qualified foreign institutional investors.
Share indices for the B-share markets dropped by about 70 percent during the
past four years, according to the latest edition of the Economic Information
The B-share markets were originally designed as provisional ones before the
country's A-share markets are to open to overseas investors.
Share prices have been on the rise over the past week as China made public
regulations that allow overseas strategic investors to buy shares on the A-share
The publication of the regulations triggered interest of investors for
profit-taking in the undervalued B-share markets as share prices jumped by more
than 10 percent over the past week.
Zhang Zhimin, an analyst with the China Securities Investment Consultancy
Co., said there are no more justified reasons for the B-share markets to remain
as overseas strategic investors are allowed to invest in the Chinese A-share
Experts say the merger may take place after China completes its ongoing share
reform later this year, which allows the State shares barred from public trading
to be floated on the A-share markets.