This Site Requires Javascript
Burger Menu

B-Shares

Definition

In finance a B share or C share is a designation for a 'class' of common or preferred stock that typically has strengthened voting rights or other benefits compared to A share that may have been created. The equity structure, or how many types of shares are offered, is determined by the corporate charter.

Source: Investopedia
This Article has been Edited for Accessibility

B-Shares

What is 'B-Shares'

Shares in companies based in mainland China that trade on either the Shanghai or Shenzhen stock exchanges. B-Shares are eligible for foreign investment provided the investment account is in the proper currency (Shanghai B-shares trade in U.S. dollars, while Shenzhen B-shares trade in Hong Kong dollars).

Explaining 'B-Shares'

B-shares trade alongside A-shares in the Chinese companies on the mainland exchanges. Changes in government regulation have allowed Chinese citizens to invest in both A-shares and B-shares after previously limiting investment to only the A-shares.

B-shares are typically what a mutual fund or exchange-traded fund that invests in China will hold, along with H-shares from the Hong Kong Exchange and N-shares, which trade on the New York Stock Exchange.

As part of a long-term effort to open up China's economy, plans are in place for the two share types to be combined in the future to allow for more uniform investment policies; if and when this occurs it should encourage more outside investment in the world's most populous country.


Additional Resources

  1. The Valuation Differential Between Class A And B Shares [monmouth.edu]
  2. Working Paper No. 504 The Market Efficiency Of The Chinese Ab-share ... [scid.stanford.edu]
  3. The Market Efficiency Of The Chinese A-b-share Market [scid.stanford.edu]
  4. Mit Economics : David Autor [economics.mit.edu]
  5. Puzzles In The Chinese Stock Market [faculty.chicagobooth.edu]