Definition
The Shanghai Stock Exchange (SSE) is a stock exchange based in the city of Shanghai, China. It is one of the principal stock exchanges in the country and ranks among the largest stock exchanges worldwide by market capitalization. The SSE operates under the supervision of the China Securities Regulatory Commission (CSRC) and offers a regulated platform for the trading of securities, including stocks, bonds, and derivatives. Established in its current form on December 19, 1990, it has a significant influence on China’s financial market and contributes to the economic growth of the nation.
Examples
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Alibaba Group’s Listing: Although Alibaba initially chose the New York Stock Exchange for its IPO, its secondary listing on the SSE’s STAR Market in 2020 drew significant attention. This example highlights the SSE’s growing appeal to major global companies.
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China Railway Construction Corporation IPO: In 2008, the China Railway Construction Corporation raised $5.7 billion through its initial public offering on the SSE, marking one of the largest IPOs in the exchange’s history.
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SSE Composite Index: This index tracks the performance of all listed stocks on the SSE, offering a barometer for the overall health and performance of the Chinese stock market.
Frequently Asked Questions (FAQs)
What Types of Securities Are Traded on the SSE?
The SSE trades a variety of securities including A-shares, B-shares, bonds, mutual funds, and derivatives. A-shares are listed in RMB (Chinese Yuan), while B-shares are listed in foreign currencies.
How Does the SSE Affect China’s Economy?
The SSE plays a crucial role in financing corporate expansions and infrastructure projects in China, aiding in capital formation and economic growth. It also serves as a barometer for investor sentiment in the Chinese economy.
Who Can Invest in the SSE?
Both domestic and international investors can participate in trading on the SSE. However, access for foreign investors is regulated, usually requiring participation through the Qualified Foreign Institutional Investor (QFII) program or other regulatory channels.
What Is the STAR Market?
The STAR Market, officially known as the Science and Technology Innovation Board, is a segment of the SSE designed to support high-tech and innovative enterprises. It aims to attract the next generation of leading companies in technology and innovation sectors.
What Are the Trading Hours for the SSE?
The SSE operates Monday to Friday, with trading hours from 9:30 AM to 3:00 PM Beijing Time, including a one-hour lunch break from 11:30 AM to 1:00 PM.
Related Terms
- A-shares: Shares denominated in Chinese Yuan and traded on the SSE and Shenzhen Stock Exchange, available to local and qualified international investors.
- B-shares: Shares traded in foreign currencies (USD on the SSE) and open to both domestic and foreign investors.
- STAR Market: A SSE sub-market focusing on science, technology, and innovative enterprises, modeled after the NASDAQ.
- CSRC: The China Securities Regulatory Commission, which supervises and regulates China’s securities markets, including the SSE.
- IPO: Initial Public Offering, the process through which a private company offers shares to the public for the first time on a stock exchange.
Online Resources
- Shanghai Stock Exchange Official Website
- China Securities Regulatory Commission (CSRC)
- Bloomberg Markets: Shanghai Stock Exchange
Suggested Books for Further Studies
- “Investment Strategies in Emerging Markets” by Peter Hoflich
- “The Chinese Stock Market Volume I: A Perspective on its Growth and Development” by Cheng-Few Lee, Xioabing Xu, John Lee
- “China’s Financial Markets: Issues and Opportunities” edited by Salih N. Neftci and Michelle Yuan Menager-Xu
- “China’s Pan-Pearl River Delta: Regional Cooperation and Development” by Yuan Li and Zhong Shan
