China H-Shares

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H-shares are common stocks issued by enterprises registered in the Mainland but listed on HKEx in Hong Kong (H-Shares' H stands for Hong Kong). H-shares are settled in Hong Kong dollars, but unlike B-shares listed on Shenzhen Stock Exchange, H-shares are denominated in Renminbi[1]. Also, unlike A-shares or B-shares, H shares are a physical, paper stock certificate, settled on "T+2[2]," and not subject to a price limit[3]. In addition to foreign investors, (Chinese) qualified domestic institutional investors (QDIIs) are permitted to invest in H shares.[4] Although individuals in the mainland are not allowed to invest directly in H shares, a new scheme unofficially called "H-share thru-train" was announced in August 2007[5]. According to that scheme, individual investors will be able to trade H-shares through the Bank of China branch in Binhai, Tianjin. However, the State Council has not made the final decision on this matter.

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