A-Shares

Loading the player...

What are 'A-Shares'

Shares in mainland China-based companies that trade on Chinese stock exchanges such as the Shanghai Stock Exchange and the Shenzhen Stock Exchange. A-shares are generally only available for purchase by mainland citizens; foreign investment is only allowed through a tightly-regulated structure known as the Qualified Foreign Institutional Investor (QFII) system.

BREAKING DOWN 'A-Shares'

Most companies listed on Chinese exchanges will offer two shares classes: A-shares and B-shares. B-shares are quoted in foreign currencies (such as the U.S. dollar) and are open to both domestic and foreign investment (provided that locals set up a foreign currency account), while A-shares are only quoted in Chinese renminbi.

A-shares experienced explosive growth in the 2005-2007 period as restrictions preventing investment by Chinese citizens slowly began to peel away. In fact, demand was so high for A-shares that they would trade for much higher valuations than what the same stock could be purchased for on a different exchange.

The Peoples' Republic of China is working to blend the two classes of stock together, and eventually allow direct foreign investment in mainland companies. It is one of many major financial reforms that the advanced economies of the world hope will occur in the next several years; there is a tremendous amount of pent-up demand for Chinese equity, provided that regulations become uniform and reporting requirements are in-line with global standards.

 

RELATED TERMS
  1. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock ...
  2. B-Shares

    Shares in companies based in mainland China that trade on either ...
  3. Red Chip

    A company based in Mainland China that is incorporated internationally ...
  4. Qualified Foreign Institutional ...

    A program that permits certain licensed international investors ...
  5. H-Shares

    A share of a company incorporated in the Chinese mainland that ...
  6. China's State Administration Of ...

    China's foreign exchange regulatory agency, which functions as ...
Related Articles
  1. Markets

    What are A-Shares?

    A-shares trade on the Shanghai and Shenzhen stock exchanges, and are exclusively quoted in Chinese renminbi.
  2. Investing

    Learning About the Shanghai Stock Exchange

    The Shanghai Stock Exchange is mainland China’s largest stock exchange.
  3. ETFs & Mutual Funds

    The Top 3 ETFs to Track the CSI 300 for 2016 (ASHR, PEK)

    Obtain information on the best available exchange-traded funds that investors seeking exposure to China can use to track the benchmark CSI 300 Index.
  4. ETFs & Mutual Funds

    The 5 Largest China ETFs (FXI, MCHI)

    Learn about the five largest ETFs that focus on the Chinese equity market, including the first to offer direct A-shares exposure to foreigners.
  5. Markets

    China’s Stock Markets vs U.S. Stock Markets

    The U.S. and China are home to the biggest stock markets in the world, but they are very different in a number of important ways.
  6. Markets

    Chinese Shares Surge on Possible MSCI Inclusion

    Chinese stocks surge on a Goldman Sachs report that A-shares have a 70% probability of being included in the MSCI Index in June.
  7. Investing

    Explaining Foreign Exchange Risk

    Foreign exchange risk is the chance that an investment’s value will decrease due to changes in currency exchange rates.
  8. ETFs & Mutual Funds

    Top 3 ETFs For Investing in China (FXI, HAO)

    Discover the top three China ETFs. Chinese stocks tend to be quite volatile, presenting opportunities for savvy investors, given the country's high growth rate.
  9. ETFs & Mutual Funds

    Top 2 Currency-Hedged China ETFs (CNHX, ASHX)

    Discover and compare two currency-hedged China exchange-traded funds. Learn about their investment strategies, characteristics and returns.
  10. Personal Finance

    Investing Beyond Your Borders

    Investing abroad poses risks, but can also help you diversify. Discover ways to invest in foreign stocks.
RELATED FAQS
  1. What are the differences between H-shares and A-shares on Chinese and Hong Kong stock ...

    Learn about A-shares and H-shares of publicly listed companies in mainland Chinese and Hong Kong stock exchanges, and the ... Read Answer >>
  2. What happens when I want to sell my A-shares of a mutual fund?

    Find out what it costs to sell A-shares of a mutual fund and learn what factors influence the overall costs of investing ... Read Answer >>
  3. Why would a company decide to utilize H-shares over A-shares in its IPO?

    Understand the difference between H shares and A shares. Learn why a company would decide to utilize H-shares over A-shares ... Read Answer >>
  4. Are Class A mutual funds a better choice for long-term investments or short-term ...

    Understand why A-shares make better long-term investments than short-term investments and how annual expenses of A-shares ... Read Answer >>
  5. What are the differences between B-shares and H-shares traded on Chinese stock exchanges?

    Learn about B shares and H shares of publicly listed companies in mainland China and Hong Kong stock exchanges, and the differences ... Read Answer >>
  6. What are the most common market indicators to follow the Chinese stock market and ...

    Learn the most commonly followed market and economic indicators used by market analysts to track the Chinese stock market ... Read Answer >>
Hot Definitions
  1. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  2. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  3. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  4. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  5. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  6. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
Trading Center