Today people invest their money in Stock market. Some people get so
addicted to the stock market. The stock market has different rules and
regulation according to country. China is one of the most growing
countries in stock market.

Color codes of Price Movement

The China Stock market
has quite opposite color codes compared to western stock markets. The
instant price is labeled in red color when price movements are positive
compared to previous day price. If it goes down compared to the
previous day closing price then the color goes green.

Shanghai Stock Exchange

Shanghai
Stock Exchange contains 2 boards. One is known as A Shares and other
one is B Shares. Both shares trade in different currencies. A-shares
traded in Reminbi and B shares are traded in U.S. Dollar. The Chinese
are allowed only to hold and trading the U.S. Dollar priced Shanghai B
shares due to China currency control policy.
So because of these local people are trading in A-market while
foreigners are treated in B market. The number of A-share companies
listing is 840 while the listing of the B share company is 54. You can
see that the B share companies are relatively small in size compared to
A-share companies. There are several companies which are listed in both
A & B shares.

Shenzhen Stock Exchange

Here
also they consider two boards – A& B shares. These both shares
traded in different currency. The A shares are traded in Reminbi while
the other one is traded in Hong Kong Dollars. Due to foreign currency
control policy, the local people trade in A-market while the foreigners
are trading in B shares because they are restricted to the Hong Kong
Dollar. There are 670 stocks listed in Shenzhen A market and in B
market the number of listed stocks is only 55. So you can see that the
size of B market is 10% less then A-Market.

What Foreigners Could Buy?

Foreigners
can buy only B shares from Shanghai and Shenzhen. They can buy shares
from Hong Kong and Taiwan because those markets are open for them.
Foreigners can invest indirectly in A stocks listed in Shanghai and
Shenzhen exchanges, for this authority is slowly starting up channels.

Buying and Selling

If
you buy shares in the A and B markets then you can’t sell it at the
same day in Shanghai and Shenzhen. You have to wait for next working
day. Here no “Shorting” allowance for the stocks. So this is a very
different technique compared to Hong Kong and many other western
exchanges. There you can sell your in the next minute when you buy it
or shorting the stock.

So in this way china stock market is
different compared to other countries stock markets. So the above
information can help foreigners a lot.