Winding up the Chinese B share market

It’s rare that anything interesting happens in China’s moribund B share market, but the last couple of weeks have been an exception – even if all the developments point to it no longer existing in the relatively near future.

Owing to China’s capital controls, there are several different types of stock listings used by Chinese companies. To recap quickly:

  • A shares are mainland-incorporated Chinese companies listed on the mainland Shanghai and Shenzhen exchanges and are denominated in renminbi. They can only be bought by mainland Chinese investors and a very limited number of qualified foreign institutional investors.
  • B shares are mainland-incorporated Chinese companies listed in Shanghai and Shenzhen and are denominated in US dollars (in Shanghai) and Hong Kong dollars (in Shenzhen). They can be freely bought both by foreigners and by mainland investors with foreign currency accounts.
  • H shares are mainland-incorporated Chinese companies listed in Hong Kong. They can be freely bought by foreigners.
  • Red chips are companies controlled by the Chinese state, but legally incorporated outside mainland China and listed in Hong Kong. Again, they can be freely bought by foreigners.
  • P chips are companies controlled by private sector Chinese businessmen that are legally incorporated outside mainland China and listed abroad. Usually, P chip is used to mean specifically Hong Kong listed stocks, with S chip being used for private firms listed in Singapore and (less commonly) N share for US-listed Chinese companies and L share for London-listed Chinese companies.

Historical valuation data for global stockmarket indices

Long-term historical data on price/earning ratios, price/book ratios and dividend yields for stockmarket indices is extremely valuable in looking at long-term returns – but it can be very difficult to obtain. While price data is available for many major markets stretching back decades or more, valuation data typically hasn’t been recorded so carefully.

The figures that are available have usually been reconstructed from old earnings reports and are proprietary data sets that are expensive to access. For those who are willing to pay, Global Financial Data is probably the most comprehensive source for very long-term financial data of all kinds.

For those who can’t justify the cost of paid-for data, there are a few freely downloadable data series for some of the major indices around the world, although they are often hard to find and there is no consistency about which markets are available. The following links will take you to the ones I’ve found that are still updated  – if you’re aware of any others, please let me know in the comments below or by email.


Total return calculations for Hong Kong stocks is a very helpful tool for researching Hong Kong-listed stocks. Run by David Webb, a former Hong Kong stock exchange independent director, the site pulls together news and information about the officers and related parties of listed companies to make it easier to find links between them and hopefully spot corporate governance red flags.

Webb also publishes regular articles on governance and regulatory issues in Hong Kong and if you’re interested in Asian markets, it’s well worth signing up for his free newsletter to get these.

The site has just added something new: A tool for calculating and comparing total returns on individual stocks with data from since 1994, which seems to be the first such free source for the Hong Kong market.


Binck Bank, DUTrade and other updates

There have been a number of updates to the stock broker directory recently. These include entries for:

  • DUTrade, an online broker based in Bahrain and covering much of the Middle East and North Africa
  • Dutch discount brokerage Binck Bank – reported to be a good choice for derivatives and structured products on European markets
  • IW Bank, the online brokerage arm of Italy’s UBI Banca
  • Hong Kong broker Core Pacific – Yamaichi

Other major additions to the site include a comparison table of US discount online brokerages for trading domestic shares and options – a long-standing request from readers – and a comparison table of Hong Kong online brokers. There’s also a comparison table for fund supermarkets in centres such as Luxembourg and Singapore that will accept foreign clients.


Boom Securities expands Japan markets and other Hong Kong stock broker updates

There are a few additions and updates to the stock broker directory for Hong Kong international stock brokers. Perhaps most notably, the purchase of Boom Securities by Japan’s Monex Group has led to some expansion of its Japanese markets offering. As well as the Tokyo stock exchange, it now offers Osaka and the three smaller regional ones: Nagoya, Sapporo and Fukuoka.

New additions to the directory include BOCI Securities (BOCI Online), KGI and HSBC Hong Kong. These three firms are unlikely to offer much that isn’t already available for most international investors, but have been added to try to make the directory more comprehensive. There are a few other firms that should be added in the near future.

BOCI Securities states that “commission rate will be determined and agreed between customer & BOCI Securities”, which isn’t terribly helpful in giving an idea of how expensive it might be. Any investors who have used it and can give an idea of what typical rates are is welcome to leave a comment below or send an email via the contact form.