UPDATE 1-China's backwater 'B-shares' spike as Hong Kong rally spills over

jueves 9 de abril de 2015 23:27 GYT
 

By Pete Sweeney and Samuel Shen

SHANGHAI, April 10 (Reuters) - China's B-share market, a long neglected corner of China's stock market, is enjoying a massive revival as a rally in Hong Kong spills over into the foreign-currency denominated B-shares trading in Shanghai and Shenzhen.

The Shanghai's dollar-denominated B-share index rose 9 percent on Friday to 346, a seven-year high and its largest one-day rally since 2009, with every single component of the index rising by 10 percent, the maximum daily limit.

The Hong Kong dollar-denominated B-shares in Shenzhen surged over 6 percent.

Analysts said the surge fanned by expectations that companies could convert B-shares into China-listed A-shares, prompting bargain hunting.

Wu Kan, head of equities trading at Shanghai-based investment firm Shanshan Finance, said investors were starting to realize the B shares, like Hong Kong stocks, were also much cheaper than Chinese stocks.

The B-share market has been a policy dead-end for years, and was widely considered an illiquid speculative swamp. It was originally created to allow Chinese companies to list shares in US dollars and Hong Kong dollars, which foreigners could then trade, but the market became moot when China began allowing its companies to list on overseas exchanges.

Since then Beijing has struggled to wind down the market without success, but has allowed some companies with dual listings to convert their B share issuances into H shares. (Editing by Eric Meijer)