Shanghai Index

The Shangai Stock Exchange is one of three stock exchanges that operate independently in the People's Republic of China. The Shanghai Stock Exchange is not entirely open to foreign investors due to tight capital account controls established by mainland authorities.

In 2008 the Shanghai Stock Exchange had 860 companies listed and its market capitalization of $3.7 trillion was the largest in mainland China and the sixth-largest exchange in the world. The exchange was re-established in 1990 and is administered by the China Securities Regulatory Commission.

Securities trading in Shanghai began in the 1860s and a market began to emerge in 1866. A boom in mining shares led to the establishment of the Shangai Sharebrokers Association in 1891. In the 1920s, the Shanghai Securities and Commodities Exchange and the Shanghai Chinese Merchant Exchange flourished; they merged in 1929 to form the Shanghai Stock Exchange.

By the 1930s the financial center of Asia was settled in Shanghai, where both Chinese and foreign investors could trade stocks, bonds and futures. The exchange closed in 1941 when Japanese troops invaded. The market reopened in 1946, but closed again in 1949 after the Communist revolution occurred.

As the Cultural Revolution occurred, China was reopened to the Western world and saw its economy begin to grow. Treasury bonds began to sell in 1981 and company stocks and bonds began to emerge by 1984. The Shanghai Stock Exchange was re-established in 1990.

The most commonly used index to reflect the Shanghai Stock Exchange's performance is the Shanghai Composite. The ten largest stocks in the exchange are PetroChina, Industrial and Commercial Bank of China, Sinopec, Bank of China, Chia Shehuna Energy, China Life, China Merchants Bank, Ping An Insurance, Bank of Communications, and China Pacific Insurance.

Shanghai Index Articles - by BetterTrades