Chinese B Shares in Shanghai Stock Exchange
(Abridged from China
Investment Report on Aug. 18, 2004)
Investing in Chinese B Shares Listed in Shenzhen Stock
Be Prepared, as They are at Multi-Year Lows
Last month’s issue of our China Investment Report detailed how we selected
quality B-Share companies currently listed in the Shanghai Stock Exchange. Using
our selection process, out of a total of 55 companies, we listed 9 companies
that we consider quality companies in Shanghai Stock Exchange’s B-share market.
In this issue, we shall use the same selection criteria, and look at B-Share
companies listed in Shenzhen Stock Exchange.
B SHARE COMPANIES IN SHENZHEN
Chinese B shares in Shenzhen are traded in Hong Kong dollars. They are one of
the most important investment vehicles for Hong Kong investors to trade Chinese
shares. Compared with stocks listed in Shenzhen and those listed in Shanghai, we
found that although companies listed in Shenzhen tend to be of high qualities
than their counterparts in Shanghai, they are traded more expensively. Below,
you will find a chart that pictures ShenZhen B-Share Index movement from 2002 to
Currently, there are 59 listed companies in Shenzhen B Share market. Again, as
we explained in the last issue of our newsletter, most of the companies listed
there, according to Jim Rogers, co-founder of the Quantum Fund, are “the
inefficient holdovers from communist days, those giant labor-intensive companies
that will never show a profit and whose going public was only a way of getting
them off the government’s hands.” Today, using similar strategies, we will
provide you with a list of quality B Share companies listed in Shenzhen. In the
next issue, we shall examine potential growth companies listed in Hong Kong
Growth Enterprise Market.
SELECTING PROCESS (Abridged)
B Shares Listed in Shanghai Stock Exchange
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