Talk of reform fails to convince B-share investors

Investors nursing long-term losses in struggling market are sceptical of regulator's warm words and some companies' conversion into H shares

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Despite a strong rally in December and early this month, many investors in Shanghai's B-share market are still carrying large paper losses, after years of decline. Photo: Xinhua

Published: 12:00am, 14 Jan 2013Updated: 7:21am, 14 Jan 2013

Davis Zhang, a long-term victim of the collapse of the mainland's hard-currency B-share market, dismisses reports that the market regulator plans to bail out investors as more empty promises.

"Whatever solution is provided, we will still lose money," he said. "Speculation about a top-to-bottom reform of the market could only create a rally in the short term and help us cut some of our losses."

Fuelled by talk of reform, the Shanghai B-share Index recorded an unbroken 15-day run-up from December 14 to January 8, advancing 17.7 per cent in the process to 262.65 points. It then gave up 3.3 per cent of those gains in the following three days, ending at 254.02 on Friday.

But despite that strong rally, many early investors in the B-share market, which saw share prices slump by as much as 35 per cent from a record set in October 2007, are still carrying big paper losses.

B-share investors like Zhang saw a ray of hope when China International Marine Container Group (CIMC), the world's largest container maker, quit its mainland B-share listing to list in Hong Kong last month.

"But in hindsight I realise I should have cashed out during the rally rather than converting my B shares into H shares," said Zhang. "My B-share investments have given me too much pain and it's time to come to a full stop."