China H-Shares

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H-shares are common stocks issued by enterprises registered in the Mainland but listed on HKEx in Hong Kong (H-Shares' H stands for Hong Kong). H-shares are settled in Hong Kong dollars, but unlike B-shares listed on Shenzhen Stock Exchange, H-shares are denominated in Renminbi[1]. Also, unlike A-shares or B-shares, H shares are a physical, paper stock certificate, settled on "T+2[2]," and not subject to a price limit[3]. In addition to foreign investors, (Chinese) qualified domestic institutional investors (QDIIs) are permitted to invest in H shares.[4] Although individuals in the mainland are not allowed to invest directly in H shares, a new scheme unofficially called "H-share thru-train" was announced in August 2007[5]. According to that scheme, individual investors will be able to trade H-shares through the Bank of China branch in Binhai, Tianjin. However, the State Council has not made the final decision on this matter.

References

  1. Product Descriptions. HKEx.
  2. Equities Leaflet. HKEx.
  3. New Investment Express. Beijing Review.
  4. Decree No. 46 of China Securities Regulatory Commission. China Securities Regulatory Commission.
  5. The SAFE Approves a Pilot Program for Direct Foreign Portfolio Investments by Domestic Individuals. State Administration of Forgign Exchange.