Advanced Search
MyIDEAS: Login

The 2001-2005 price convergence in the A- and H-shares of Chinese state-owned enterprises: A story of unprecedented economic, regulatory and political change

Contents:

Author Info

  • Thomas A. Birtch
  • Paul B. McGuinness
Registered author(s):

    Abstract

    Purpose – The purpose of this paper is to examine the population of Chinese state-owned enterprises (SOEs) listing A- (Chinese Mainland) and H- (Hong Kong) shares with a view to explaining differential pricing across the two stock types. Design/methodology/approach – Despite the fact that both A- and H-shares carry ostensibly the same shareholder benefits, when issued by a given SOE, major pricing differences are apparent. The behaviour of such prices for 20 quarters spanning January 2001 to December 2005 was examined. During this period, a marked contraction in the mean A- to H-price relative occurred, whereby A-prices generally softened and H-prices soared. Findings – It was noted that that the principal factors relevant to the contraction in the A- to H-share price relative relate to two issues: first, an enveloping risk premium centring on state-share disposal fears, and second, the firming of expectations surrounding the likely deployment of a qualified domestic institutional investor (QDII) scheme. Research limitations/implications – Modelling of changing expectations, especially in relation to uncertain policy deployment, is an invidious task. Measurement of such expectations is obviously strewn with difficulties. Originality/value – As pertinent factors largely hinge on the deliberations of the PRC state, the analysis herein provides useful input into how policy can either wittingly or unwittingly shape general share price movements. Such insights are especially important given the evolving nature of the Chinese economy.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=80FFFBBE47F7296810E50526098E60BF?contentType=Article&contentId=1738055
    Download Restriction: Cannot be freely downloaded

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Emerald Group Publishing in its journal Journal of Financial Regulation and Compliance.

    Volume (Year): 16 (2008)
    Issue (Month): 3 (July)
    Pages: 239-250

    as in new window
    Handle: RePEc:eme:jfrcpp:v:16:y:2008:i:3:p:239-250

    Contact details of provider:
    Web page: http://www.emeraldinsight.com

    Order Information:
    Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
    Email:
    Web: http://www.emeraldinsight.com/jfrc.htm

    Related research

    Keywords: China; Economic processes; Nationalization; Prices; Share values;

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eme:jfrcpp:v:16:y:2008:i:3:p:239-250. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Louise Lister).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.