Shanghai Stock Exchange (SSE)
The Shanghai Stock Exchange is a non-profit organization that is run by the China Securities Regulatory Commission (CSRC). The SSE, in its earliest form, dates back to the 1840s after the Treaty of Nanking was made in 1942 and was the beginning of foreign trade in China. Market securities trading began in the late 1860s and in 1891 a group of foreign businessmen founded the "Shanghai Sharebrokers' Association" which became the "Shanghai Stock Exchange in 1904.
In the early 1920s the "Shanghai Securities & Commodities Exchange" and the "Shanghai Chinese Merchant Exchange" began operating, but in 1929 the three groups merged and started operating as the Shanghai Stock Exchange. During the 1930s Shanghai became the financial center of the East and allowed both Chinese citizens and foreigners to trade stocks, government bonds, debentures and futures.
This all ended when Japanese troops invaded Shanghai in 1941. The exchange was closed for three years, opened in 1946 and then closed again in 1949 during the Communist revolution. After years of economic reforms and opening China up to the rest of the world, the Shanghai Stock Exchange was re-established in November of 1990 and opened on December 19, 1990.
Recent years have seen many ups and downs and a year long ban was imposed on IPOs from April 2005 to May 2006. An investing frenzy temporarily made the SSE the world's second largest market, in terms of turnover, in 2007 and 2008.
Stocks, Bonds and Funds
The three main categories on the SSE are stocks, bonds and funds. Bonds include treasury bonds (T-bonds), corporate bonds and convertible corporate bonds. The T-bond market is the most active market in China. Stocks are categorized as "A" shares and "B" shares. "A" shares are priced in the Chinese currency, called renminbi or Yuan, and "B" shares are quoted in US. Dollars. Limitations are in place to regulate foreign investors who want to trade "A" shares.
Open-ended funds, close-ended funds, Listed Open-ended Funds (LOFs) and Exchange Traded Funds (EFT) are available to trade in the funds category. ETFs are a more recent addition to the SSE, only being added in 2004. Money market funds are not yet available for foreign investors to trade.
State and Privately Owned Companies
China's biggest state-owned enterprises (SOE) and privately owned companies comprise most of the listings on the SSE. Although unknown to most of the world, they are huge players and familiar names in China. The Industrial and Commercial Bank of China (ICBC), Bank of China (BOC), China Merchants Bank (CMB) and Bank of Communications top the list of major banks. China Life, Ping An Insurance and China Pacific Insurance are the main insurers on the exchange. Sinopec and China Shenhua Energy Company are the top SOEs on the SSE.
While it ranked third in terms of volume and fifth in inter-bank deposit bond balances in 2011, the Shanghai Stock Exchange hasn't yet reached its peak of influence on the world due to the fact that it's not entirely open to foreign investors. Investing experts suggest that the SSE will not reach the status of the New York or London exchanges until it internationalizes the Chinese currency and opens up the market to all investors.
Shanghai's Financial District
The financial district is situated in the newly developed Pudong area of Shanghai, China. The Shanghai World Financial Center, Shanghai Stock Exchange and the Lujiazui Finance and Trade Zone are all situated within Shanghai's financial hub.