China Shares
From Financial Literacy Wiki
China Shares are split into many classifications. And they are:
- A Shares
- B Shares
- H Shares
- Red Chips
These terms are commonly seen in unit trusts that invest in Greater China region. For us to understand the regional allocation of the unit trusts or how much of the fund is invested in Hong Kong, Taiwan or China stock markets, it is advisable to understand these terms.
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A Shares
A Shares belong to companies incorporated in mainland China and are traded in the mainland A-share markets. The prices of A shares are quoted in Renminbi (or Yuan), and currently only mainlanders and selected foreign institutional investors are allowed to trade A shares.
B Shares
B shares belong to companies incorporated in mainland China and are traded in the mainland B-share markets (Shanghai and Shenzhen). B shares are quoted in foreign currencies. In the past, only foreigners were allowed to trade B shares. Starting from March 2001, mainlanders can trade B shares as well. However, they must trade with legal foreign currency accounts.
H Shares
H Shares belong to companies incorporated in mainland China and are listed on the Hong Kong Stock Exchange and other foreign stock exchanges.
Red Chips
Red chips are companies incorporated and listed in Hong Kong with controlling Chinese shareholders.
