Tuesday, November 17, 2009

Brace for a wave of new traders

Brace for a wave of new traders, say analysts

Analysts say the number of traders set to buy into the China B market could be enormous, with estimates that there is as much as $70 billion in hard currency held in private bank account in China.

China has two types of hard currency B shares -- one traded in U.S. dollars on the Shanghai stock exchange and the other in Hong Kong dollars on the southern Shenzhen bourse.

Other observers say the rush to trade China B shares could be muted, since some estimates say that up to 90 per cent of China B shares are already owned and traded by local Chinese investors.

"They may have exploited any number of loopholes to be holding hard currency, or they may have permission to hold hard currency and trading the shares legally," said Hong Kong-based Li Lian Ong, an economist with the Macquarie Bank.

Despite this, Ms Ong and other observers have welcomed the move on China's part of open up its share markets.

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