These days, Zhang Nin gladly sacrifices her short lunch breaks so she can line up at the bank and buy US dollars for local currency.
The 24-year-old marketing executive at a Shanghai wine company needs the money to buy hard-currency B-shares, which recently have emerged as an even hotter commodity than the sizzling local-currency A-shares.
"I bought some B-shares on Tuesday and two days later they had risen by about 15 percent," she said. "That's amazing, as A-shares I bought three weeks ago only earned me about 20 percent of profit."
China's stock markets have skyrocketed in recent days and weeks, boosted by massive inflows of investor money.
But while the A-share market has boomed, retail investors have found that some B-shares issued by the same companies have risen even faster.
A-shares are denominated in the Chinese currency and were originally reserved for local investors, while previously only foreigners could buy B-shares, denominated in either US dollars or Hong Kong dollars.
The distinctions between the two have disappeared somewhat as local people have been permitted to buy B-shares since early this decade, while foreigners are allowed into the A-share market via qualified foreign institutional investors.
Most of the 110 B-shares are also listed on the A-share market and they are generally cheaper than their A-share peers, with an average discount of 20 percent to 30 percent, said Zhang Qi (
"The price disparity of A-shares and B-shares has always been there," Zhang said.
"But it was only in late April that retail investors suddenly woke up to find the value of B-shares was low from the past bearish years and started to speculate on them," Zhang said.
The Shanghai B-share Index surged 80 percent in the month ending on Thursday, compared with a 12 percent rise in the benchmark index in the same period.
Turnover on Thursday was more than US$7 billion, more than double the value of the Taiwanese market.
The B-share market was originally established in an attempt to channel foreign funds into listed firms, but foreigners have shown little interest.
"Foreign investors have better options like the Hong Kong market if they want to invest in Chinese firms, that's why B-share market is now dominated by retail investors -- they prefer inexpensive stocks," said Gui Haoming with Shenyin Wanguo Securities (
The once marginalized B-share market, with a market capitalization merely 2 percent of the US$2.3 trillion A-share market, is seeing sharper rises now, but it may also become a spearhead should a correction come.
"I think some B issues are obviously overvalued as their fundamentals have barely changed from years ago. We had better be cautious," Gui said.
"The B-share market would be more vulnerable to large swings as most participants are individuals," he said.
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