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Trading blitz looms for B shares
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Police and securities regulators will be out in force today as China allows domestic residents for the first time to trade in hard-currency B shares at the Shanghai and Shenzhen stock exchanges.
Last week's rule changes by the China Securities Regulatory Commission allowing local citizens to buy and sell B shares, which are traded in US dollars in Shanghai and Hong Kong dollars in Shenzhen, has sparked an unprecedented outpouring of interest in the otherwise thinly traded market.
Much of this demand has been fuelled by the heavy discounts at which B shares trade compared with yuan-denominated stock, leading many to expect easy profits.
On Monday, a record 126,775 new B-share trading accounts were opened by residents at the Shanghai and Shenzhen bourses, enlarging the number of B-share accounts in the mainland by about half, the Shanghai Securities News reported.
At the end of last year, there were 258,400 B-share trading accounts nationwide.
Securities companies across the country have been extending business hours and increasing security in an effort to avoid the chaos that gripped Shenzhen in 1992 when thousands rioted after they were unable to secure applications to buy stocks.
The resumption after a break in B-share trading last week in preparation for the rule changes has come despite a failed lobbying campaign by brokerage houses to prolong the suspension to allow them to cope with the massive workload.
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