This report looks at the general performance of the Shanghai Stock Exchange to try and come up with the reasons behind the successes of this Stock market in the past three to four years. Founded on Nov. 26th, 1990, and starting operation on Dec.19th the same year the Shanghai Stock Exchange (SSE) has been in operation till today with a membership of the China Securities Regulatory Commission (CSRC). In order to make the SSE a transparent, open, safe, and efficient marketplace it relies on legislation, supervision, self-regulation, and standardization as its basic principles of operation (Chow, 2007).
The Shanghai Stock Exchange Composite Index or is the more common indicator in use that reveals the SSE’s market performance. The SSE Composite Index of all listed stocks is in two categories, which are the shares and B which are the shares traded at the Chinese Stock Exchange in Shanghai. Nineteenth December the year nineteen ninety is the day which is a base day for the composite index of SSE; this base had a value of a hundred. This index was initiated on the fifteenth July, the year nineteen ninety-one and by the end of the year two thousand and six it had clocked the value of 2,675.47. Among the other important indexes applicable in the Shanghai Stock Exchanges include the SSE 50 Index and SSE 180 Index (The shanghai Stock Exchange).
The listed securities at the SSE are in three categories which include the bonds, the stocks, and the funds. The kinds of bonds, which are transacted at the SSE usually include corporate bonds, treasury bonds, and corporate bonds which are convertible. SSE Treasury bond market report is one of the most active activities in the Chinese market. In the Share market, a share is given a price from the determinations made at the local Renminbi exchange for A-shares, on the other side B-shares are traded in U.S. dollars. After the implementation of the reforms of the month of December the year two thousand and two, investors from other countries were allowed to do their trade in the A-shares scheme by the guidance of the investor system known as Foreign qualification Institutionalization which was also governed by some restrictions (Chow, 2007).
With current experience in the market being in operation, the SSE has grown into one of the most top stock markets in Mainland China as a result of an increase in the listed number of organizations or shares, companies, the value of the market, market value which is tradable, turn over of value of securities and the turn over of the treasury bonds. In December of the year, two thousand and seven the trading at the stocks ended with an amount which was over seventy-one point three million investors and eight sixty companies which were listed. The summation of capitalization of the SSE gained a record of RMB 26.98 trillion. In 2007, Capital raised from the SSE market surpassed RMB 661.6 billion. Many companies large and medium from major infrastructure, higher technology sectors, and industries have increased the capital and also made an impact in improvements to the mechanism of their operation by just listing on the Shanghai stock market.
Some of the big companies listed in the SSE include; Petro China worth 3,656.20 billion shares, China Commercial and Industrial Bank worth 1,417.93 billion shares, Sinopec 961.42 billion shares, Bank of China with 894.42 billion shares, and China Shenhua Energy Company with 824.22 billion shares. After a 4-year slump use of between 2001 and 2004 of the SSE, it resumed full operations in 2006 with the world’s largest-ever IPO by ICBC (Industrial & Commercial Bank of China) worth US$ 21.9 billion. This was followed by a speculative rush into the market which made the stocks become temporarily number two in terms of output in the year two thousand and seven (Kissan and William, 1993).
This growth has inspired developing the United States of American firms to invest in China and obtain such things as the exact feasibility of such a plan. Investors in the world have become aware of the Chinese stocks and are thriving to do business in them. Therefore this might be the reason for the steady incline in the number of investors on the SSE hence the success of this market (Chow, 2007).
References
Chow, G.C. (2007). China: economic transformation. Macmillan Publishers.
Kissan, D. E. & Williams, L. D. (1993).Shares and Stocks investments: Stock Exchange investment methods. Pitman & sons.
“The shanghai Stock Exchange”. From The Shanghai Stock Exchange; Web.