Equity Valuation in Mainland China and Hong Kong PDF Download

Author: Zhijun Zhao
Publisher:
ISBN:
Category : Stocks
Languages : en
Pages : 28

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Author: Zhijun Zhao
Publisher:
ISBN:
Category :
Languages : en
Pages : 31

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This paper studies the links between fundamental value and market price of the companies listed in both mainland A-share and Hong Kong H-share markets. As the valuation model has been inadequately applied in the literature, this study theoretically clarifies that the dividends discount model (DDM) and it derivatives are suitable for firms, but not for general consumers and investors, to evaluate equity fundamental values. Thus, using DDM and its derivatives to determine the market price of equity, which has been done in many other studies, is problematic. This paper also empirically studies how accounting data determines fundamental values of equities using a pooled-data vector autoregressive method. It indicates that although fundamental value can be a benchmark for investors to price equity, prices of equity may deviate from fundamental values substantially for a long time due to differences in preference and the extent of risk aversion between A-shares and H-shares. Correlation between equity price and its fundamental value for H-shares is larger than the correlation for A-shares. This paper also explains why there has been a big price gaps between A-shares and H-shares with exactly the same yields rights. The estimates of fundamental value for each company help investors make rational investment decisions. It suggests that, in the long run, healthy development of Chinese securities markets will depend on the progress of privatisation and marketisation of the Chinese economy. Measures such as the Qualified Foreign Institutional Investors (QFII) and Qualified Domestic Institutional Investors (QDII) programmes should be adopted to improve the efficiency of financial resources utilisation in mainland China, despite the short-run pressure that may put on A-share markets.

Author: Patrick Müller
Publisher: diplom.de
ISBN: 3836609967
Category : Business & Economics
Languages : en
Pages : 122

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Inhaltsangabe:Abstract: This paper aims at explaining the phenomenon of price anomalies between dual-class shares of companies located in mainland China (hereafter China). A-shares listed on either the Shanghai Stock Exchange (SHSE) or Shenzhen Stock Exchange (SZSE) command a premium over the price of the corresponding firm s H-shares traded at the Stock Exchange of Hong Kong (HKSE). This pricing puzzle arises from the segmentation of Chinese equity markets H-shares may be exclusively acquired by Hong Kong residents and international investors whereas A-shares are restricted to mainland Chinese investors. Although both classes of stock are entitled to the same future cash flows, investors are only willing to buy H-shares at a price significantly lower than that of A-shares. This unique setup offers the opportunity to test competing theories about the effects of market segmentation on asset pricing and to examine the factors that induce the price gap between cross-listed shares on different stock exchanges. Knowledge of the variables determining the price spread between H- and A-shares can make valuable contributions in a number of ways. Firstly, companies in mainland China pursuing initial public offerings (IPO) or seasoned equity offerings (SEO) may base their financing decision on a more thorough understanding of the parameters affecting stock prices of cross-listings in the respective markets. Secondly, policymakers in emerging country stock markets may draw conclusions concerning the design of foreign ownership regulation and investment restraints imposed on domestic and foreign investors. Lastly, international and local investors may build on a more profound understanding of the H- versus A-share discount (hereafter H-share discount) to narrow down attractive investment opportunity sets, especially in the light of the latest regulatory changes on the Chinese equity market. As of August 2007 the government body monitoring and regulating the national currency, China s State Administration of Foreign Exchange (SAFE), loosened its rigorous foreign exchange policy. Prior to the recent SAFE ruling, the annual amount to be freely converted from Chinese Yuan Renminbi (RMB) into foreign currencies was capped at a 50,000 United States Dollar (USD) limit. Under the new regime, mainland retail investors are granted unlimited convertibility of RMB into Hong Kong Dollar (HKD) given that investments flow into the Hong Kong securities market. In the [...]

Author: BNP Paribas Peregrine
Publisher:
ISBN:
Category : Stock exchanges
Languages : en
Pages : 56

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Author: Flora Xiao Huang
Publisher: Routledge
ISBN: 1134671040
Category : Social Science
Languages : en
Pages : 280

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Listing by companies from one country on the stock market of another country is a device often used both to raise capital in, and to increase bonding with, the target country. This book examines the listing by Chinese companies on the Hong Kong stock market. It discusses the extent of the phenomenon, compares the two different regulatory regimes, and explores the motivations for the cross-listing. It argues that a key factor, in addition to raising capital and bonding with the Hong Kong market, is Chinese companies’ desire to encourage legal and regulatory reforms along Hong Kong lines in mainland China, in order to develop and open up China’s domestic capital markets.

Author: Bing Wang
Publisher: Springer Nature
ISBN: 3030490327
Category : Business & Economics
Languages : en
Pages : 312

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China’s economy has been transforming rapidly over the last 25 years. As a result, Chinese conurbations have changed remarkably, with cities expanding both vertically and horizontally, and the physical environment acting as a medium for unprecedented urbanization. This has provided vast opportunities for investors, real estate developers, and service companies, but also presents huge challenges—as traditional city spaces have been reconfigured, environmental risks and the volatility of real estate markets increased. However, as engagement with China is becoming strategically important for many, forming a synthesized lens through which to read China across the vicissitudes of its real estate sector bears historic significance. By offering an insightful framework and structure for understanding China’s variegated real estate dynamics, players, and markets, Understanding China’s Real Estate Markets codifies the principles and practices of real estate development, finance, and investment in China and builds foundations for future academic research and practical knowledge in shaping and engaging the urban environment within China and beyond.

Author: Mike Lok-him Chan
Publisher:
ISBN:
Category : Corporations
Languages : en
Pages : 23

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Author: jshop.javvin.com
Publisher: Javvin Technologies Inc.
ISBN: 1602670064
Category : Business
Languages : en
Pages : 560

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This handbook is designed to help investors and financial professionals understand how China's stock market operates, and to harness their power to win more. It includes fundamental information of both the mainland China and Hong Kong markets.

Author: Yang-Chao Wang
Publisher:
ISBN:
Category :
Languages : en
Pages : 10

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China has been intensively launching opening-up policies since November 2014. Among these policies, the Shanghai-Hong Kong Stock Connect offers international investors an approach to investing directly in Mainland China stock markets. At the same time, Mainland China capital can gain access to overseas markets via Hong Kong. This study investigates the influence of the policy by using the Vector Autoregressive and Generalized Autoregressive Conditional Heteroscedastic framework. The results show that the new policy has different impacts on the Shanghai, Shenzhen, and Hong Kong stock markets due to their distinct market features and policy restrictions. The three markets also transmit the policy effects to one another due to their close linkages. It not only indicates that Mainland China financial centers (Shanghai and Shenzhen) integrate with one of international financial centers (Hong Kong), but also symbolizes the gradually increasing strength of Chinese policy effects on global capital markets.

Author: Kwok Chiu Fung
Publisher:
ISBN:
Category : Investments, Chinese
Languages : en
Pages : 42

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