CHINA'S fledgling B-share markets are now in a state of limbo until the Government decides how extensive the use of H shares will become, a research analyst with Jardine Fleming Shanghai says.
Stephen Wong said if Beijing encouraged the development of H shares, which were being used to list the nine mainland enterprises on the Hongkong Stock Exchange, then investors would simply have no interest in B shares.
''It is not clear at this moment whether the Government will prefer B shares,'' he said. ''All of us are waiting for Government policy.'' Many Hongkong investors had made it clear they preferred H shares because they were able to obtain much more information about the companies being listed, he said.
Lack of interest plus concerns about China's political and economic conditions have hurt the Shanghai and Shenzhen markets.
This was made clear last Wednesday when Shanghai's B-share market hit a record low.
With the exception of Jingiao, Mr Wong said all of Shanghai's B shares were trading below their issue price.
He said this had forced foreign institutions which had bought stock to adopt a long-term perspective because they were unable to sell shares at the moment.
