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China plans to merge A, B shares: report

SHANGHAI: China is likely to merge its domestic A share and hard-currency B share markets within 10 years, the official Xinhua news agency said on Sunday, quoting a research report.

The A share market is aimed at domestic investors and B shares are reserved for foreigners, though some local investors exploit regulatory loopholes to trade B shares.

By 2010, the shares of listed firms will be allowed to circulate outside state control, the agency said, quoting a report by a research team headed by Wu Xiaoqiu of the Financial and Securities Institute under the People's University of China.

China's listed firms have sold only a small portion of their stock to the public, with an average 60 to 70 percent still in the hands of the state.

Beijing is likely to approve both stock index and foreign currency futures in the next 10 years, the report said.

China's futures contracts are limited to agricultural and other commodities, but securities industry sources have said that regulators are considering the launch of stock index futures.

The report said the number of listed companies would rise to 2,000 over the next 10 years. China had 949 listed firms at the end of last year, according to official statistics.

The combined value of China's stock markets was forecast to hit 13 trillion yuan ($1.57 trillion), accounting for half of the nation's gross domestic product, by 2010, the report said.

The combined capitalisation of the Shanghai and Shenzhen markets is now close to 3.0 trillion yuan, according to official figures.

To approve online stock trading

BEIJING: China will legalise online stock trading in a set of soon-to-be-released regulations, paving the way for electronic day trading to go mainstream, state media said in a weekend report.

"These regulations display sound foresight and allow room for flexible market operations," Xinhua news agency quoted an unnamed source as saying.

Despite an official ban, authorities have quietly permitted several securities dealers to provide online trading services.

Current online dealers include Communications Securities Co, the Guotai-Jun'an Securities Co, the Huatai Securities Co and Huaxia Securities.

Zhu Yongqiang, the technical supervisor of Huatai Securities, said on-line customers now account for five percent of their business.

Legend, the country's leading computer company, has also launched a television set-top box that would allow investors to to buy and sell shares through their televisions.-Reuters