70 years on

China Daily - - MOSAIC -

Ed­i­tor’s note: This year marks the 70th an­niver­sary of the found­ing of New China.

On Jan 15, 1992, Shang­hai Vac­uum Elec­tron De­vices Co is­sued China’s first B-share cer­tifi­cate, and one month later the shares were listed on the Shang­hai Stock Ex­change. At the time, B shares were only is­sued to over­seas in­vestors.

The is­sue and trad­ing of B shares marked the en­try of the lo­cal se­cu­ri­ties in­dus­try into the world mar­ket.

B shares were lim­ited to for­eign in­vestors un­til Fe­bru­ary 2001, when au­thor­i­ties be­gan per­mit­ting the ex­change of B shares to do­mes­tic cit­i­zens via the sec­ondary mar­ket.

In Shang­hai, B shares are traded in dol­lars.

An item from China Daily on Feb 27, 2001, showed in­vestors in Guangzhou, Guang­dong prov­ince, fill­ing in forms to open B-share ac­counts at a branch of Bank of China.

In re­cent years, au­thor­i­ties have made it much eas­ier for in­vestors to gain ex­po­sure to shares on China’s stock mar­ket.

The gov­ern­ment opened the Chi­nese main­land mar­ket through the Shang­hai-Hong Kong Stock Con­nect in 2014 and the Shen­zhen-Hong Kong Stock Con­nect in 2016.

Last year, global in­dex com­piler MSCI in­cluded China large-cap A shares on its MSCI Emerg­ing Mar­kets In­dex, mark­ing an­other step for­ward for China’s as­sim­i­la­tion into the global fi­nan­cial mar­ket­place.

In Sep­tem­ber, FTSE Rus­sell, an in­dex in Lon­don, an­nounced that it would add the Chi­nese main­land’s yuan-de­nom­i­nated A shares to its global eq­uity bench­marks in phases, start­ing in June this year.

The long-awaited Shang­haiLon­don Stock Con­nect is ex­pected to be launched this year.

Un­der the link, Chi­nese com­pa­nies listed in the A-share mar­ket will be able to raise money in Lon­don, while Chi­nese in­vestors will be able to pur­chase shares in British com­pa­nies, but the in­vestors will not be able to raise fresh funds.

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