SHANGHAI STOCK

EXCHANGE
Submitted By:Rachit Arora(0131PG034)
Hemant Aggarwal(0131PG014)

Nitish Bhanot(0131PG031)

INTRODUCTION
The Shanghai Stock Exchange (SSE) is based in the city of Shanghai,
China.
It is one of the two stock exchanges operating independently in the People's
Republic of China.

The other is the Shenzhen Stock Exchange.

SSE is the world's 6th largest stock market by market capitalization at
US$2.3 trillion as of Dec 2011.

Unlike the Hong Kong Stock Exchange, the Shanghai Stock Exchange is still
not entirely open to foreign investors due to tight capital account controls
exercised by the Chinese mainland authorities.

HISTORY
The formation of the International Settlement in Shanghai was the result of the Treaty of Nanking of
1842

Subsequent agreements between the Chinese and foreign governments were crucial to the
development of foreign trade in China and of the foreign community in Shanghai.
The market for securities trading in Shanghai begins in the late 1860s.

The first shares list appeared in June 1866

Then Shanghai's International Settlement had developed the conditions conducive to the
emergence of a share market.
Several banks, a legal framework for joint-stock companies, and an interest in diversification
among the established trading houses.
In 1891 during the boom in mining shares, foreign businessmen founded the "Shanghai
Sharebrokers' Association" headquartered in Shanghai as China's first stock exchange.

CONTD.
In 1904 the Association applied for registration in Hong Kong under the provision of the
Companies ordinance and was renamed as the "Shanghai Stock Exchange.
The supply of securities came primarily from local companies. In the early days, banks
dominated private shares but, by 1880, only the Hong Kong and Shanghai local banks
remained.
Later in 1920 and 1921, "Shanghai Securities & Commodities Exchange" and "Shanghai
Chinese Merchant Exchange" started operation respectively.

An amalgamation eventually took place in 1929, and the combined markets operated
thereafter as the Shanghai Stock Exchange.
By the 1930s, Shanghai had emerged as the financial centre of the Far East.
Where both Chinese and foreign investors could trade stocks, debentures, government
bonds, and futures.
The operation of Shanghai Stock Exchange came to an abrupt halt after Japanese
troops occupied the Shanghai International Settlement on December 8, 1941.

CONTD..
In 1946, Shanghai Stock Exchange resumed its operations before closing again 3 years
later in 1949, after the Communist revolution took place.
After the Cultural Revolution ended and Deng Xiaoping rose to power, China was reopened to the outside world in 1978.
During the 1980s, China's securities market evolved in tandem with the country's
economic reform and opening up and the development of socialist market economy.
During the 1980s, China's securities market evolved in tandem with the country's
economic reform and opening up and the development of socialist market economy.

TYPES OF SECURITIES
The SSE is composed of several types of stocks
A-shares ffor Chinese domestic investor and are denominated in Renminbi(RMB)
Legal shares : A type of A-share designated for companies to buy
State Shares : Hold by the Government(which also owns the companies so in turn the
Government also owns legal shares)
B shares : can be purchased by holders of foreign passport(including Hong Kong) and
are denominated in U.S Dollars in December 1998.B shares had a combined value of
4.37 billion
N-Shares and L-Shares : Chinese enterprise listed on the New York and London stock
exchange

LISTING REQUIREMENT
An issuer that applies to SSE for listing its IPO shares shall meet the following
conditions:

1. Its shares have been issued to the public with the approval of the CSRC;
2. Its total amount of share capital shall not be less than RMB 50 million;
3. Its shares issued to the public account for 25% or more of its total shares; for an
issuer whose total share capital exceeds RMB 400 million, the aforesaid percentage
shall be 10%;
4. It has not committed any serious illegal act and there has been no falsehood in its
financial reports in the most recent 3 years

MAREKT OVERVIEW
In 2012, the total turnover on SSE was RMB 54753.523 billion, up 20.43% year-on-year.
Stock transactions were RMB 16454.501 billion, representing 30.05% of the total
turnover. Bond transactions hit RMB 37981.885 billion, accounting for 69.37% of the
total turnover.
Fund transactions reached RMB 317.136 billion, making up 0.58% of the total. The
average daily stock transactions were RMB 67.714 billion, down 30.45% year-on-year;
daily bond transactions stood at RMB 156.304 billion, 80.99% higher than a year earlier;
daily fund transactions hit RMB 1.305 billion, up 9.76% from the previous year.

CONTD
SSE 50 Index opened the year at 1628.17 points and gained 14.84% to close the year at
1857.68 points after touching a yearly high of 1877.43 points and a yearly low of 1528.28
points. SSE 180 Index opened the year at 5043.26 points and gained 10.80% to close
the year at 5550.09 points after touching a yearly high of 5808.99 points and a yearly low
of 4596.73 points.

SSE Composite Index opened the year at 2211.99 points and fell 21.68% to finish the
year at 2269.13 points after making a yearly high of 2478.38 points and a yearly low of
1949.46 points, with a volatility of 3.17%.

By the end of 2012, SSE recorded a total of 109.7 million trading accounts.

As of February 2008, 861 companies were listed on the SSE and the to SSE reached RMB 23,340.9 billion (US$3,241.8 billion; US$1 = RMB 6.82).

MARKET PERFORMANCE

Data updated on 18 February 2008

Stock listings

Market value

Annual turnover value

(billion yuan)

(billion yuan)

A shares

850

26,849.7

30,196.0

B shares

54

134.2

347.4

Total

904

26,983.9

30,543.4

MARKET HIGHLIGHTS
No. of listed companies - 954
No. of listed securities - 2098
No. of listed stocks - 998
No. of new listings -26
Share capital issued (100 million shares) - 24617.62
Tradable shares (100 million shares) - 19521.34
Total market capitalization (RMB100 million) - 158698.44
Market capitalization of tradable shares (RMB100 million) - 134294.45

SSE TOP 10 LARGEST STOCKS

PetroChina (3,656.20 billion)
Industrial and Commercial Bank of China (1,417.93 billion)
Sinopec (961.42 billion)
Bank of China (894.42 billion)
China Shenhua Energy Company (824.22 billion)
China Life (667.39 billion)
China Merchants Bank (352.74 billion)
Ping An Insurance (272.53 billion)

Bank of Communications (269.41 billion)

China Pacific Insurance (256.64 billion)

GOOD PLACE TO INVEST

40 qualified Foreign Institutional Investors(QFII),with combined investment worth US$63.2 billion
66% of the listed companies at SSE have commenced share reform, which involves 67.85% of the
overall market capitalization value
The introduction of Qualified Domestic Institutional Investors(QDII) scheme will further facilitate
China capital market development

OVERVIEW
Total capital raised (RMB100 million)
A Shares (RMB) - 2890.31
B Shares (US dollar) - 0
Transactions
Number of trading days - 243
Annual turnover value (RMB100 million) - 547535.23
Stock - 164545.01
Fund - 3171.36
T-bonds - 379818.85
Warrants - 0

Others - 0

CONTD
Average daily turnover value (RMB100 million) -2253.23
Average daily stock turnover value (RMB100 million) -677.14
Annual stock turnover volume (100 million shares) -18948.94

Average daily stock turnover volume (100 million shares) -77.98

Total number of stock trades (10,000 deals) -92554.96
Average number of daily stock trades (10,000 deals) -380.89

CONTD
Stock Indices
o SSE 180 Index yearly high -7149.05
o SSE 180 Index yearly low - 4852.71
o SSE 180 Index year-end close -5009.29
o SSE Composite Index yearly high -3067.46
o SSE Composite Index yearly low -2134.02
o SSE Composite Index year-end close -2199.42
Ratios
o Average P/E ratio -12.30
o Turnover rate 1 (market capitalization)(%) -78.57
o Turnover rate 2 (free-float capitalization)(%) -101.60