Trading in China's B shares on the Shanghai and Shenzhen stock exchanges will be suspended for the rest of the week while Beijing finalises details of a major policy change that will allow domestic investors to trade in the shares.
B share trading on the exchanges was halted yesterday afternoon after rumours surfaced that Beijing would allow domestic investors to trade in them. By morning close Shanghai B shares had gained 3.57 per cent to 83.201 points and Shenzhen B shares had gained 1.75 per cent to 127.72 points.
It was, however, announced on CCTV prime-time news last night that mainlanders with legal foreign exchange accounts would be allowed to trade B shares, which have been reserved for foreigners since 1992. This allowed them to invest in the economy without destabilising markets.
Analysts said the move could mark the beginning of the eventual merger of the local and foreign share markets.
Mainlanders are restricted to trading in the A share market. A shares are traded in yuan and B shares in foreign currencies - US dollars in Shanghai and Hong Kong dollars in Shenzhen.
Beijing's move will help remove the differences between the two share markets on the mainland.
