Saturday, October 28, 2006

Difference between ICBC's A share and H share

ICBC, finally, got listed, after a month's hard work of my colleagues and me. The first trading day, interesting things happened, A share in Shanghai increased by 5 percent, while H share in Hong Kong rose by 15 percent. (A share and H share were priced same) People asked why, and I asked too to SH fund managers. They have different answers, and I quoted them as well. But I got one simple answer for myself(not for newpaper, nor for anyone else) is like this:

Compare the average consumer price in SH and HK, SH is lower than HK of course. Then how come could the stock to have the same price between SH and HK?

So the trading different is natural to me. Then I got the question: so what will be the relations between stock market and consumer price? Will the stock market in HK with many mainland stocks same with SH lead the SH consumer price finally? or SH stock price will tend to be lower than HK for the same company?

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