Stock Market Guide to the Shanghai Stock Exchange on Stock Markets
The Shanghai Stock Exchange (SSE) was formed in 1990 and was in operation a month later in the city of Shanghai as the biggest exchange in Mainland China. China Securities Regulatory Commission (CSRC) controls this non-profit making membership institution. The SSE bases its development on the principle of "legislation, supervision, self-regulation and standardization" to produce an open, transparent, efficient and safe marketplace.
After nearly two decades the SSE has become the most preeminent stock market in Mainland China. This is in terms of its listed companies, total market value, the amount of shares listed, the value of securities turnover, tradable market value and the stock and T-bond turnover in value. At the end of 2004 the Shanghai Stock Exchange had a total of 837 companies listed and 37.87 million investors and with a total market capitalization of RMB 2.6 trillion.
The securities that are listed at the SSE incorporate three main categories of stocks, funds and bonds. The bonds that the SSE trades with include corporate bonds, treasury bonds (T-bond) and convertible corporate bonds. Out of all these bonds the one that is the most active in China is the T-bond market. The Shanghai Stock Exchange issues two types of stocks: A and B shares. ‘A’ Shares are priced in the local Renminbi yuan currency where as the B shares are traded in U.S dollars.
At first A shares could only be bought up by domestic investors while B shares were available to both domestic and foreign investors. Since 2002 foreign investors have been given limited ability to trade in A shares under the Qualified Foreign Institutional Investor system with the forethought of combining the two later on. Some of the largest stocks listed in the Shanghai Stock Exchange are the Industrial & Commercial Bank of China, China Life Insurance, Bank of China, China Petroleum and Chemical and China Merchant Bank.
Shanghai is not only the biggest port in China it is also one of the biggest cities in the world. This famous port is the center of trade, technology, finance, culture and information, reporting reports 540.876 billion yuan of gross domestic product in year 2002. It is also the largest industrial based city in China with 166 different kinds of industry of which 157 are with in Shanghai. Shanghai is seen as China’s main economic powerhouse with a reported 540.9 billion yuan or US$65.4 billions worth of Gross domestic product in 2002.