Shanghai Stock Exchange Fact Book 2001 THE SHANGHAI SECURITIES MARKET ............................................... 4 HISTORICAL REFERENCE ............................................................................................................... 4 KINDS OF SECURITIES.................................................................................................................... 4 2001 MARKET REVIEW ........................................................................................... 5 GENERAL PROFILE OF TRADING .................................................................................................... 5 SECURITIES ISSUE AND LISTING .................................................................................................... 6 INFRASTRUCTURE .......................................................................................................................... 6 OPERATIONAL MECHANISMS ......................................................................................................... 8 SUMMARY OF MAJOR EVENTS OF THE SHANGHAI SECURITIES MARKET IN 2001 ....................... 13 MARKET SUMMARY..................................................................................................................... 15 STOCK MARKET.......................................................................................................... 16 TRADING SYSTEM........................................................................................................................ 16 THE INVESTORS’ TRADING FEE AND OTHER FEES....................................................................... 17 MONTHLY SHARE VOLUME, TRADING V ALUE AND P/E RATIO.................................................... 19 20 MOST ACTIVE STOCK BY TRADING V ALUE............................................................................. 20 20 MOST ACTIVE STOCKS BY TRADING VOLUME........................................................................ 21 TOP 20 ADVANCERS..................................................................................................................... 22 TOP 20 DECLINERS ...................................................................................................................... 23 MARKET V ALUES AND WEIGHTS OF SAMPLE SHARES IN THE SSE 30 INDEX (AS OF THE END OF 2001) ........................................................................................................................................... 24 EXPLANATION OF THE COMPILATION OF THE SHANGHAI INDEX.................................................. 25 SSE 30 INDEX IN 2001 ................................................................................................................ 29 HISTORICAL MOVEMENT OF SSE 30 INDEX ................................................................................ 30 SSE COMPOSITE INDEX IN 2001 .................................................................................................. 31 HISTORICAL MOVEMENT OF SSE COMPOSITE INDEX.................................................................. 32 MARKET V ALUES AND WEIGHTS OF SAMPLE SHARES IN THE SSE 30 INDEX (AS OF THE END OF 2001) ........................................................................................................................................... 33
Transcript
Shanghai Stock Exchange Fact Book 2001
THE SHANGHAI SECURITIES MARKET ...............................................4
HISTORICAL REFERENCE ...............................................................................................................4 KINDS OF SECURITIES....................................................................................................................4
GENERAL PROFILE OF TRADING ....................................................................................................5 SECURITIES ISSUE AND LISTING ....................................................................................................6 INFRASTRUCTURE..........................................................................................................................6 OPERATIONAL MECHANISMS.........................................................................................................8 SUMMARY OF MAJOR EVENTS OF THE SHANGHAI SECURITIES MARKET IN 2001 .......................13 MARKET SUMMARY.....................................................................................................................15
TRADING SYSTEM........................................................................................................................16 THE INVESTORS’ TRADING FEE AND OTHER FEES.......................................................................17 MONTHLY SHARE VOLUME, TRADING VALUE AND P/E RATIO....................................................19 20 MOST ACTIVE STOCK BY TRADING VALUE.............................................................................20 20 MOST ACTIVE STOCKS BY TRADING VOLUME........................................................................21 TOP 20 ADVANCERS.....................................................................................................................22 TOP 20 DECLINERS ......................................................................................................................23 MARKET VALUES AND WEIGHTS OF SAMPLE SHARES IN THE SSE 30 INDEX (AS OF THE END OF
2001) ...........................................................................................................................................24 EXPLANATION OF THE COMPILATION OF THE SHANGHAI INDEX..................................................25 SSE 30 INDEX IN 2001 ................................................................................................................29 HISTORICAL MOVEMENT OF SSE 30 INDEX ................................................................................30 SSE COMPOSITE INDEX IN 2001..................................................................................................31 HISTORICAL MOVEMENT OF SSE COMPOSITE INDEX..................................................................32 MARKET VALUES AND WEIGHTS OF SAMPLE SHARES IN THE SSE 30 INDEX (AS OF THE END OF
CONDITIONS FOR LISTING ...........................................................................................................34 LISTING PROCEDURES .................................................................................................................34 DOCUMENTS TO BE SUBMITTED WHEN APPLYING FOR LISTING ..................................................35 CONDITIONS FOR SHARE PLACEMENTS .......................................................................................35 SPECIAL TREATMENT...................................................................................................................36 TEMPORARY SUSPENSION OF TRADING AND CESSATION OF LISTING ..........................................37 LISTING AGREEMENT ..................................................................................................................38 LISTING FEES...............................................................................................................................38 SECTOR DISTRIBUTION OF COMPANIES LISTED...........................................................................39 GEOGRAPHICAL DISTRIBUTION OF LISTED COMPANIES ..............................................................40 NEWLY LISTED SHARES IN 2001...................................................................................................41 SHARE ISSUANCE OF NEWLY LISTED COMPANIES IN 2001 ..........................................................44 SHARE ISSUANCE OF NEWLY LISTED COMPANIES IN 2001 (CONTINUED) ...................................47 DISTRIBITION OF RATIONED SHARES BY LISTED COMPANIES IN 2001.........................................50 DISTRIBUTION OF BONUS BY LISTED COMPANIES IN 2001 ..........................................................51 EQUITY STRUCTURE OF LISTED COMPANIES AT THE END OF 2001...............................................63 TOP 50 LISTED COMPANIES BY TOTAL MARKET VALUE..............................................................64 TOP 50 LISTED COMPANIES BY TOTAL MARKET VALUE..............................................................66 TOP 50 LISTED COMPANIES BY OUTSTANDING VALUE ................................................................68 LISTED COMPANIES SUBJECT TO ST AND PT IN 2001..................................................................70 DELISTED COMPANIES IN 2001....................................................................................................71 CHANGES OF COMPANIES’ NAMES IN 2001 .................................................................................71 ASSET RESTRUCTURING OF LISTED COMPANIES .........................................................................72
BOND MARKET.............................................................................................................73
SUMMARY....................................................................................................................................73 CONDITIONS FOR LISTING OF GOVERNMENT BONDS ..................................................................73 CONDITIONS FOR LISTING OF CORPORATE BONDS ......................................................................74 CONDITIONS FOR LISTING OF CONVERTIBLE BONDS...................................................................74 TREASURY BONDS LISTED IN 2001..............................................................................................75 DEBENTURES IN 2001 ..................................................................................................................75 CONVERTIBLE BONDS IN 2001.....................................................................................................75 MONTHLY TRADING ACTIVITIES OF TREASURY BONDS IN 2001..................................................76 MONTHLY TRADING VALUE OF TREASURY BOND REPO IN 2001 .................................................76 MONTHLY TRADING VALUE OF TREASURY BOND SPOT IN 2001 .................................................77
SUMMARY....................................................................................................................................78 TRADING ACTIVITIES OF FUNDS IN 2001.....................................................................................79 WEEKLY AND MONTHLY CHANGES IN NET ASSETS OF SECURITIES INVESTMENT FUNDS ...........80
GEOGRAPHICAL DISTRIBUTION OF A SHARE INVESTORS ............................................................99 GEOGRAPHICAL DISTRIBUTION OF B SHARE INVESTORS ..........................................................100 DISTRIBUTION BY EDUCATION...................................................................................................100 DISTRIBUTION BY AGE ..............................................................................................................100 DISTRIBUTION BY GENDER........................................................................................................100 HISTORICAL RECORDS OF ACCOUNTS OPENED（TO BE EXAMINED） ......................................100
SUMMARY..................................................................................................................................101 GEOGRAPHICAL DISTRIBUTION OF THE SSE’S MEMBERS AND THEIR BUSINESS DEPARTMENTS
..................................................................................................................................................102 NUMBER OF MEMBERS IN HISTORY...........................................................................................102 TOP 50 MEMBERS BY TRADING VALUE IN 2001(IN TENS OF THOUSANDS YUAN) ......................103 TOP 50 MEMBERS BY REGISTERED CAPITALS IN 2001 ..............................................................104 TOP 10 MAIN UNDERWRITERS BY NO. OF IPOS IN 2001 ...........................................................105 TOP 10 MAIN UNDERWRITERS BY SHARE VOLUME OF IPOS IN 2001........................................106 TOP 10 MAIN UNDERWRITERS BY CAPITAL RAISED FROM IPOS IN 2001 ..................................106 TOP 10 MAIN UNDERWRITERS OF RIGHTS ISSUE BY NO. OF COMPANIES IN 2001 .....................106 TOP 10 MAIN UNDERWRITERS OF RIGHTS ISSUE BY NO. OF SHARE VOLUME IN 2001..............107 TOP 10 MAIN UNDERWRITERS OF RIGHTS ISSUE BY CAPITAL RAISED IN IPOS IN 2001 ............107
TRADING VALUE OF SHARES .....................................................................................................108 HIGHEST VALUE OF SHARE TRADING ........................................................................................108 UP AND DOWN RECORDS OF THE SSE 30 INDEX.......................................................................110 UP AND DOWN RECORDS OF SSE COMPOSITE INDEX ............................................................... 111 SHARES LISTED .........................................................................................................................112 INTERNATIONAL SECURITIES MARKETS ....................................................................................113
PERIODICALS .............................................................................................................................115 OTHER PUBLICATIONS ...............................................................................................................115
The Shanghai Securities Market
Historical Reference Shanghai was the first city in Mainland China for stocks, stock trading and a stock exchange to emerge. Stock trading can be traced to the 1860s and in 1891, the establishment of the Sharebrokers Association formed the embryonic form of Mainland China’s stock exchange. Both in 1920 and 1921，the Shanghai Securities and Commodities Exchange and Shanghai Huashang Securities Exchange opened for business. By the 1930s, Shanghai had become the financial center of the Far East and both Chinese and foreign investors could trade in the stocks of Chinese and foreign companies, bonds as well as government bonds and futures etc through brokerages. In 1946, the Shanghai Stock Exchange Co., Ltd. was founded on the basis of the Huashang Securities Exchange which ceased operation in 1949. Since 1980, China’s securities market has gradually developed under the guidance of Deng Xiaoping Theory and following reforms and opening to the outside world and development of the socialist market economy. In 1981, the issue of bonds was resumed and in 1984 Shanghai and other areas began to issue shares and corporate bonds. On November 26, 1990，Shanghai Stock Exchange (hereafter referred to as “SSE”) came into existence and officially opened for business on December 19 of the same year. At present, the Shanghai securities market has already entered a new stage of development, which is shown in: I. Rapid expansion of market scale. To the end of 2001, the SSE’s 744 listed securities and 646 listed companies represented a total market value of stocks of RMB 2,759.1 billion. The number of investors with accounts reached 34,296,000. In 2001, as much as RMB 95.749 billion in accumulated capital was raised through the SSE’s issue of stock and rights issues. II. Gradually improving infrastructure. A computerized automated trading system can handle as many as 6,000 transactions per second has been established with satellite communication system and digital data communication networks backing each other up as data transmission systems. The clearing system has taken the lead in Asia in realizing a paperless depository and highly-efficient legal person settlement system. III. The degree of regulation is continually rising. The initial basis for a self-regulatory system has formed with the supervision of listed companies and members and the monitoring of the market.
Kinds of Securities The securities listed at the SSE include the three main categories of stocks, bonds and funds. Stocks were divided into A Shares and B Shares with A Shares designated for the purchase and trading of local Chinese investors and B Shares for the purchase and trading of offshore investors. On February 19, 2001, the China Securities Regulatory Commission (CSRC) announced the opening of the B Share market to local Chinese individual investors. In 1990, the first batch of eight A Shares was listed and in 1992, the first B Share was listed. Following the listing of a large number of State owned enterprises and high quality civil-operated and enterprises with three
forms of investment, the Shanghai securities market began to reveal its function as a barometer for the national economy. To the end of 2001, a total of 690 A Shares and 54 B Shares had been listed. Bonds include government bonds, corporate bonds and convertible bonds. The SSE’s government bonds market is the most buoyant circulation market for government bonds in the Chinese Mainland. In 1993, the launch of repurchasing of government bonds exerted the mortgage function of government bonds while also widening the range of bonds and stimulating trading and investment. To the end of 2001, the SSE had a total of 11 government bonds available, 8 kinds of government bonds available for repurchase and 11 financial and corporate bonds and 1 convertible bond. In 1998, 4 securities investment funds were issued and listed in Shanghai, opening a new chapter in the development of the funds market. By the end of 2001, there were a total of 23 listed securities investment funds listed and trade on the SSE.
2001 Market Review
General Profile of Trading In 2001, the total amount of all securities traded on the Shanghai Stock Exchange was RMB 4,414.403 billion, RMB 575.745 billion less than the previous year, representing a decrease of 11.5%. This included RMB 2,270.938 billion of stock trading, accounting for 51.4% of total traded amounts, RMB 866.448 billion less than the previous year, a decrease of 27.6%. RMB 1,987.684 billion of A Shares were traded, RMB 1,115.285 billion less than the previous year, a decrease of 35.9%. Due to their opening to local Chinese people, in 2001, B Shares registered a total traded amount of RMB 283.254 billion, a growth of RMB 248.837 billion over the previous year and 8.23 times that of the previous year. In 2001, the traded amount of government bonds on the Shanghai Stock Exchange was RMB 1,972.604 billion, more than RMB 292.177 billion over the previous year and a growth of 17.4%. This included spot trading of RMB 438.306 billion, up RMB 72.60 billion over the previous year, growing 19.9%; Repurchasing of RMB 1,534.298 billion, up RMB 215.977 billion over the previous year, growing 16.7%. RMB 134.892 billion was trade in funds, RMB 1.474 billion more than the previous year, a growth of 1.1%. Compared to the previous year, the daily average amount of stocks traded on the Shanghai Stock Exchange was RMB 9.462 billion, a decrease of 27.9% over the previous year. The daily average amount of bonds traded was RMB 8.248 billion, a growth of 16.7% over the previous year. In 2001, the number of investors with accounts at the Shanghai Stock Exchange was 34,296,000, a growth of 15.6% compared to the end of the previous year. This included 33,269,300 A Share investors, a growth of 15.9% over the previous year; 929,700 B Share investors, a growth of 540.3% compared to the end of the previous year. There were 158,700 institutional investor account holders, an increase of 37,500 compared to the end of the previous year, representing a growth of 30.9%. The proportion of institutional investors’ accounts to total investor accounts increased from 0.44% at the end of 2000 to 0.46%.
Securities Issue and Listing To the end of 2002, a total of 646 companies were listed on the Shanghai Stock Exchange, including 72 newly-listed companies, a growth of 12.9% compared to the end of the previous year. Here were 690 different stocks listed, 76 more than the previous year, a growth of 12.4%. The total market value of stocks was RMB 2,759.1 billion, a growth of 2.5% compared to the end of the previous year and circulating market value was RMB 838.2 billion, a decrease of 1.2% compared to the end of the previous year. The total share equity of listed companies was 316.4 billion shares with circulating equity of 83.8 billion shares, circulating equity accounting for 26.5% of total share equity. By April 5, 2001, all the listing of the transferred and placed shares of listed companies was completed. In 2001, the Shanghai Stock Exchange raised a total of RMB 95.749 billion, it all being from A Share financing, a growth of 4.7% over the previous year. This included RMB 53.429 billion raised through the issue of new A Shares, and RMB 42.32 billion raised through re-issued stock (additional share issues, rights issues, sales of state shares).
Infrastructure
In 2001, Shanghai Stock Exchange continued to push forward its development of technology system infrastructure and strengthen technical management to ensure safe operation of the market. (I) Communications infrastructure and level of technology jumped to a new level The construction of satellite earth stations is one of the major achievements Shanghai Stock Exchange has made in recent years in the area of technological development. It is presently one of the largest, most technologically advanced, most functionally complete and most broad-covering satellite communication networks in China. It not only includes the Shanghai Stock Exchange’s earth station for satellite communication and computer disaster recovery center but also includes the CSRC’s new technology tracking study laboratory. It serves as a multifunction base for the IT systems operation and scientific research of the Shanghai Stock Exchange and China securities and futures industry. Its construction is of far reaching importance in guaranteeing the secure and efficient transmission of securities information, further expanding the coverage of the Shanghai securities market and promoting market development. To ensure the smooth relocation of satellite earth stations, soon after work was began on the earth stations, Shanghai Stock Exchange formulated the “Overall Plan for the Relocation of Earth Station for Satellite Communications”. Due to the detailed planning, tight organization and putting in place of emergency measures, not one communication accident occurred during the course of relocation. Shanghai Stock Exchange also completed the upgrade testing for the one-way satellite broadcasting system and began to implement the installation of the master station. Following capacity-expansion, the way station capacity of the two-way satellite communication network will reach 2,300. The system integration project installation has basically been completed on 500
aligned dial-up backup items. The relocation and cutover of the new computer rooms in Wuhan and Shenzhen communication stations was completed and realized a whole year’s safe operation. (II) Trading system capacity reached advanced international standards. Following memory expansion, the trading system capacity peak value reached 8,000 transactions per second with an average of 4,500 transactions per second. It can handle a daily amount of 29,000,000 commissioned transactions with 60,000,000 transactions executed. The system capacity ranks among the world leaders in the industry. (III) Major progress achieved in the field of IT The Internet strategy consulting project being developed through cooperation between Shanghai Stock Exchange and Boston Consulting Group entered the implementation stage. This project was based on development of information technology, trends in the securities industry and the opportunities and challenges facing the Shanghai Stock Exchange. Through a large amount of interviews and in-depth investigations and research on all levels, 9 items were summarized and then through a specific analysis of various key factors including human resources, finances, physical assets, planning and organization and schedule control, a preliminary implementation plan was established which put forward the objective of developing the Shanghai Stock Exchange into a first-class international online investment information service provider. At present, Shanghai Stock Exchange has already basically completed the design work for its new website. Additionally, interchange of data between Shanghai Stock Exchange, Hong Kong Exchanges and Clearing Ltd. and Shenzhen Stock Exchange has already begun and the data warehouse project has also been officially launched. (IV) Preliminary stage argumentation work for the new generation trading system has been
completed. Construction of a new generation trading system has officially gotten underway. A business demand analysis, comparative research both at home and overseas, feasibility report and project planning and other work for the new generation trading system have already been completed and set a firm foundation for the smooth launch of the new generation trading system. (V) Technical management has been vigorously strengthened, realizing a whole year of safe
operation with zero malfunctions The first aspect was to summarize the lessons of past experience and use this as a basis to formulate flows for the emergency handling and anticipation of anomalous events in trading operation. The purpose of this is to be able to quickly judge conditions and locate emergency countermeasures as soon as possible in the event of an anomalous event in trading operation and restore normal operations so as to minimize the effect on the market. The second aspect was to further improve technical management and operation procedures and developing procedures such as the “Two-person Verification for the Suspension and Resumption of Operation” and “Shanghai
Index Audit Procedures”. The third aspect was to resolutely implement the examination and verification system for anomaly reports and new service operation to attach great importance to mistakes that did not lead to serious negative consequences and give commendation and encouragement to rationalization proposals that help to protect against risks. The granting of operational safety awards was linked to the degree of risk of work posts and individual worker’s performance. The fourth aspect was the operational maintenance of the Telecommunications Company VAST Two-way Satellite System passed ISO9002 quality system accreditation. (VI) Active collaboration with the structural reform of the depository and clearing system Shanghai Stock Exchange fully supports the organization and founding of the China Securities Depository and Clearing Co., Ltd. To ensure the smooth transition of the depository and clearing system, Shanghai Stock Exchange and the China Depository Company carried out detailed research and full negotiation on the linking of related work procedures and dealing with potential risks and hazards following the splitting up of the former Depository Company and Shanghai Stock Exchange and signed a business framework agreement and memorandum of agreement to effectively ensure the safe operation of the market.
Operational Mechanisms In 2001, Shanghai Stock Exchange actively implemented and pushed forward each of the reform measures for the securities market, strengthened the market system, consolidated market supervision and control, promoted market service, managed the exchange in strict accordance with the law, deepened the development of investor education, strengthened investigation and study in accordance with the dispositions of the CSRC, general adoption of the market principles in the securities market and requirements for standardization. The exchange achieved positive development in each of thee areas of work. I. Actively carrying out and promoting development methods of reform of the securities
market according to the directives of the CSRC. 1.The first delisting of a PT Company was smoothly executed a according to general adoption of the market principles and principles of standardization. Shanghai Stock Exchange places high importance on de-listing work and has always made establishing withdrawal mechanisms from the securities market and maintaining social stability key points for attention in its work. It regards delisting work as a historical political mission in securities market reform and construction. It formulated the PT delisting work plan in strict accordance with the “Implementation Measures for the Temporary Suspension of Trading and Cessation of Listing of Loss-making Listed Companies” and formulated a preliminary case to deal with eventual legal proceedings and adopted strong measures to strengthen security and ensure normal order of the market.
2．The smooth opening of the B Share market to individual Mainland Chinese residents. From the suspension of B Share trading on February 19 to the re-opening of B Share trading on February 28, Shanghai Stock Exchange overcame time constraints and many arduous difficulties, from improving market regulation, strengthening supervision and control work; Strengthening the renovation of systems technology for B Share trading, settlement, opening of accounts etc, to ensure safe operation. It launched real-time account opening for B Shares and put efforts into providing excellent market services. Every week, it made adopted pertinent measures based on the findings of timely weekly inspections of the status of opening of accounts, trading, capital transfer, communications and cooperation with banks etc. Its efforts allowed it to successfully complete its mission of opening the B Share market to individual local Chinese investors. II. Assisting the CSRC to complete its examination and verification of corporate issues In order to adapt to the reforms of the issuing and examination system, Shanghai Stock Exchange shifted the emphasis of its market development department work from receiving guests, dealing with enquires and providing service to the examination and verification of issues. At the same time, it overcame numerous difficulties in its own work and resolutely supported the examination of issues work undertaken by the CSRC. Under the guidance of the CSRC, the Shanghai Stock Exchange business personnel working on issue examination and verification work already basically possess the ability to independently examine and verify cases. Shanghai Stock Exchange has also basically completed the preparations for the release of the nationwide unified indices and actively cooperated with the CSRC to extend stock trading hours, unify the “Three Main Codes” and carry out investigation and debate over non-circulating stock agreement transfers and other proposals. III. Improve the risk discovery and protection mechanisms and further increase the force of
supervision and control On the basis of strengthening the construction of systems, Shanghai Stock Exchange has formed a supervisory system comprised mainly of listed company supervision, member corporation supervision and real-time monitoring of the market. It established efficient risk protection and reaction mechanisms. To further enhance the level of market supervision and control and discover and eliminate market risks in a timely fashion, Shanghai Stock Exchange established a regular meeting system for market supervision and control and risk prevention. On one hand, the regular supervisory meetings created conditions for communication and exchange between operating departments and provided a basis for the supervisory functional departments to make advance determination of key members to monitor and set precautions for. On the other hand, it gave the supervisory functional departments a definite goal for the concluding of supervisory measures and provided an organizational safeguard for controlling the spread of risks. Through the channel of holding regular supervisory meetings, each of the functional department can pool their talents and work together to pro-actively face market hazards in a timely way. This has resulted in a combined strength to control risks and enhanced the ability of each of the business departments in the exchange to make a concerted
reaction to market risks. Objectively speaking, it has established risk location mechanisms and risk protection mechanisms. The force of listed company supervision was further increased. Over the last year, rules and regulations were formulated including the audit measures for listed company information disclosure. A 5-level management system for company risk was introduced and this increased the advance warning ability against risks. Advanced precautions and supervision and control of events in progress were strengthened and clues for supervision were received from a variety of means and through various channels. The coordination of supervisory work between securities administrations in various regions was strengthened. The stricter examination of annual reports was also implemented. The exchange carried out key supervision of important information and key targets. The first was continuing to require that listed companies carry out a number of disclosures at different times regarding asset restructuring, setting standard requirements for the compilation of affiliated trading announcements, supervise and urging listed companies to complete work for the convening of general meetings of shareholders for the current year, signing statements and letters of commitment of board directors and chief financial officers as well as the timely fulfillment of information disclosure obligations. Secondly, key supervision was given to the information disclosure and asset restructuring of PT companies the within the grace period. Thirdly was the carrying out of key monitoring of the trading conditions of hot shares in the market such as Zhongke Special, PT stocks, A Shares containing B Shares, stocks that had consecutively dropped to their lower limits, ST Zhengzhou Baiwen, Founder Technology, member corporations hoarding large amounts of Guangxia (Yinchuan) Industrial and misappropriating clients margin, and bank special seats selling out large amounts of stock. Fourthly was the temporary suspension of trading of ST Zhengzhou Baiwen and 72 abnormally fluctuating stocks and the emergency suspension of Jinjian Rice. The pertinence of member annual inspections was strengthened. This year’s annual inspection closely incorporated the key supervisory work of the CSRC in 2000 and developmental changes in the market and invited for the first time an Expert Appraisal Committee made up of intermediaries and expert professors to carry out evaluation of the financial status and operating results of members. A preliminary index system adapted to the Annual Inspection Appraisal was established which will help to discover risks and cases of infringement in the operations of members in a timely fashion. The Shanghai Stock Exchange will divide securities companies’ members into three categories of A, B, C according to the evaluation of the Expert Appraisal Committee of members and the Shanghai Stock Exchange’s auditing opinion of member annual inspection materials. For category C, it will adjust supervisory measures including the minimum ratio of cash reserves, tracking analysis and monitoring of trading. It has increased the force of supervision and control according to the law. Over the whole year, a total of 63 listed companies were subject to public censure, internal reprimand and other dispositions. Verbal warnings were issued to 78 sub-member business departments and written warnings were given to 8 sub-member companies. 2 member companies were summoned for discussions. There were an accumulated total of 94 special cases for investigation by the competent securities authorities, with 92 involved securities. The exchange cooperated with the Enforcement Bureau of the CSRC to carry out investigation of the trading of securities investment funds, the trading conditions of stocks undertaking asset restructuring 6 months prior to
restructuring as well as suspected stock trading violations. The level of digitalization in supervisory work was raised. A listed company temporary announcement computer facsimile system, listed company communication platform and listed company daily operational management system were established. A preliminary online information supervision system was also established. The real-time monitoring index system increased from 10 to 14 and chart analysis, key monitoring and report transmission functions were developed. Hot Standby was realized in the front-end server of the real-time monitoring system. A real-time monitoring system for B Shares was developed. Monitoring procedures for funds were developed. IV. Actively promoting market service and making practical progress in investor education To further strengthen service and form an integrated form a strategic level, Shanghai Stock Exchange formulated the “Shanghai Stock Exchange Service Outline”. Its aim is to further strengthen the mechanisms for collaboration and cooperation between each functional department, establish information feedback and complaint mechanisms and improve the methods for the evaluation of items of service. Using this opportunity, membership services, fully designated trading services, the two-way satellite way station technical service project and Shanghai securities market data express service project were launched. The scientific and rational design of operation flows and simplification and standardization of business procedures received the acknowledgement and praise of the market. In the area of service for listed companies, over the last year, Shanghai Stock Exchange held “Zhongguancun Training Courses for Companies Planning to List” in Beijing and other areas and more than 10 other large-scale promotional activities. They explained the approval system, company administration and information disclosure etc., moving forward its service work. To make practical advances in its investor education work, over the last year, Shanghai Stock Exchange has developed a series of different forms of investor education activities around the theme of protecting the interests of investors. An investor education inter-network was established linking Galaxy Securities and 19 member organizations with Shanghai Stock Exchange at its core. It cooperated with the securities regulatory offices and special offices in various regions to carry out a wide range of investor education activities. In cooperation with Shanghai University of Finance and Economics and other institutions, it compiled “How to Read an Annual Report” and other intermediate level investor education series of books. It also actively cooperated with the CSRC to carry out the editorial work of the “Investor Education Column” in the Shanghai Securities Newspaper. It also enriched the content of the external network “Investor Education” column. It established the “‘Carry out the Clearly Define the Responsibilities of Various Parties in the Securities Market’ Education Program”. V. Managing the exchange according to the law and standardizing operations According to the newly-revised “Stock Exchange Management Methods” and the new situation and new tasks China faces following its entry to the WTO, Shanghai Stock Exchange firstly revised the listing rules, trading rules and other business rules under the guidance of the CSRC. Secondly, it held symposiums on managing the exchange in accordance with the law and invited
well-known experts from the CSRC, Legislation Work Committee of NPC as well as Beijing University and other units to offer suggestions and advice for Shanghai Stock Exchange management according to the law. Thirdly, it carried out a classified inventory of internal regulations in the exchanges operations and further improved the regulatory system of the Shanghai Stock Exchange’s operations. Fourthly, it strengthened research into the securities legal system, improved supervisory mechanisms and actively prevented and eliminated the risks of legal proceedings and legal disputes due to supervisory work. Fifthly, it further enhanced legal consultation service system. Sixthly, it began work on protecting intellectual property rights. Additionally, Shanghai Stock Exchange also successfully completed the inspection work of the “Securities Law” law administration inspection team of the Shanghai Stock Exchange. VI. Carry out in-depth market research and further strengthen research work. The Exchange Party Committee has made in-depth grass roots investigation and research an important aspect of its supervisory work. According to actual conditions at the Shanghai Stock Exchange, the Exchange Party Committee formulated a detailed research and development plan to carry out in-depth and detailed on site research and development into cities and regions in East China, South China and northwest China including Shanghai, Shenzhen, Guizhou, Yunnan and Guangzhou on the theme of current hot topics in the securities market such as “service and innovation”, “comparison of company information disclosure”, “technological security, service and planning” as well as “banking product innovations” etc. It provided first hand knowledge to better carry out supervisory and service work. It completed the second phase joint research program and strengthened the organizational management of research work. It established the “Shanghai Securities Joint Research Program Implemented Standards and Procedures” and “Shanghai Securities Joint Research Program Project Expenses Management Methods”. It also published a collection of works of the Shanghai Securities joint study and started the third phase of the joint research program. It completed research into a number of major topics. This included topics such as investor protection, extending the trading times, stock exchange development strategy, “Warrant Plan” for reductions in holdings of State shares, successes and failures of China listed companies, securities company bankruptcy, Marketmaker system, construction of the securities legal system, business requirements of the new generation trading system, follow-up research on company administration, Combo fund etc.
Summary of Major Events of the Shanghai Securities Market in 2001 February 20 Following approval by the State Council, the CSRC decided to allow
domestic residents to open B Share accounts and trade in B Shares using legally held foreign exchange.
March 26 Huaan Fund Management Co., Ltd. was designated as the first experimental Open-End Fund.
29 The China Securities Regulatory Commission issued the “Methods for the Regulation of New Issues of Listed Companies” and at the same time, established new regulations for the conditions for placing of shares and issuing additional shares.
31 China Securities Depository and Clearing Co., Ltd. was founded in Beijing with branches established in Shanghai and Shenzhen.
April 13 The China Securities Regulatory Commission announced the listed company quarterly report disclosure system would be implemented, requiring that from the first quarter of next year, all listed companies must compile and disclose quarterly reports.
19 The first new shares UFSOFT were issued under the approval system with an issue price of RMB 36.68 and P/E ratio of 64.35.
24 PT Narcissus was officially de-listed. This marked that first time since the opening of the market that the number of listed companies on the Shanghai Stock Exchange reduced, decreasing from 608 to 607.
25 The first China listed companies quarterly report (SH Container quarterly report) appeared.
30 China Securities Regulatory Commission issued the implementation measures for the issue of convertible bonds by listed companies.
May 18 China Securities Regulatory Commission issued the “Guidance on New Share Issues by Online Price Auctions”.
June 1 The B Share market was fully opened to domestic residents and the B Share created a new all-time high.
8 The SSE and SZSE new listing rules were promulgated. 14 Temporary Methods on Decreasing Social Guarantee Funds Financed
by State Shares” was released. 14 The Shanghai Composite Index set a new year high of 2,245.43 points,
which was also an all-time high. 20 China Securities Regulatory Commission published the “Securities
Companies Management Methods (exposure draft)”. 22 SINOPEC published a prospectus and issued a total of 2.8 billion shares,
setting a new record for the issue of A Shares. 29 Advice of China Securities Regulatory issue a notice: Implementation of
new accounting standards for information disclosure July 4 The nation social security fund participated in SINOPEC’s offering.
5 Banks were allowed to act as agents for securities business. August 17 China’s first Open-End Fund, Huaan Innovation, received approval to
establish. September 11 China’s first Open-End Fund, Huaan Innovation was pout on sale. October 9 CSRC issued a notice regarding the transfer of non-circulating shares
agreements. 23 CSRC announced the termination of the sale of state shares when
making preliminary issues and additional issues of shares. November 14 The Ministry of Foreign Trade and Economic Cooperation and CSRC
jointly released the “Various Opinions regarding the Involvement of Foreign Investment in Listed Companies” and announced that after restructuring, foreign enterprises could issue A Shares or B Shares on the Shanghai and Shenzhen securities markets.
16 The stamp duty was uniformly reduced to 0.2% for both A Share and B Share securities trading.
December 5 CSRC decided to abolish the PT system from January 1 of the following year
22 CSRC published Temporary Provisions on Establishing Fund Management Companies Participated in and Organized by Overseas Organizations” (exposure draft), and Sino-foreign cooperative fund management companies entered an actual start-up phase.
SSE 30 Index High 4118.48 4263.17 4369.10 SSE 30 Index Low 2946.42 2963.15 2411.07 SSE 30 Close 3069.17 3935.33 2989.94 SSE Composite Index High 2245.44 2125.72 1756.18 SSE Composite Index Low 1514.86 1361.21 1047.83 SSE Composite Index 1645.97 2073.48 1366.58
Market Ratios Average P/E ratio at year end 37.71 58.22 37.09 Turnover rate 1（market value）(%) 75.44 144.19 116.36 Turnover rate 2（outstanding value）(%) 244.27 449.06 399.22
Note: Turnover rate 1＝(Turnover in value/total market value)×100% Turnover rate 2＝(Turnover in value/Outstanding value)×100%
Stock Market
Trading System The trading hours of the SSE are from every Monday to Friday. The morning session is 9:15am to 9:25am being the time for centralized competitive pricing and 9:30am to 11:30am the time for consecutive bidding. The afternoon session is 13:00pm to 15:00pm being the time for consecutive bidding. The market is closed on Saturdays and Sundays and other holidays announced by the SSE. The SSE market dealings use a centralized competitive pricing to complete transactions and all trading of listed securities must be carried out through openly declared bidding via a mainframe computer. The mainframe will then automatically conclude deals based on the principal of price precedence and time precedence. Offers can be divided into tangible on floor tangible and intangible off-floor according to the different modes of order transmission. Orders that are inputted into the mainframe computer via members seats at the SSE are called tangible on floor offers. Orders that are made via terminals at members’ sales departments and communication equipment are called intangible off-floor offers. The SSE practices a fully designated trading system for the trading of securities. All investors undertaking securities trading at the SSE must first clearly designate a member and enter into a “Designated Trading Agreement” with that member allowing it to act as agency to make and settle transactions. Trading may only commence after the personal securities account of investors are designated under their appointed member’s seat. As regards the prices of securities trading, the SSE generally practices a policy of following the market and free bidding. At present, all A Shares, B Shares and funds are subject to daily rise and fall restrictions of 10%. ST Shares are subject to daily rise and fall restrictions of 5%. SSE makes timely releases of trading market data and information to members and investors. Daily real-time market quotations, indices made up of various different share prices, settlement data, market information reports and daily transaction data is transmitted to each member’s business counters via a satellite communication system or optical fiber communication systems. Transaction information is instantly transmitted to each member via a two-way satellite land-based optical fiber cable communication system. According to the provisions of the open information system for the trading of stocks and funds, more detailed information is published about the securities gaining the most during each day’s trading.
The Investors’ Trading Fee and Other Fees
（As of the end of 1 December 2001）
Items Fee Charging Standard
Commission 0.35% of the trading value, no less than 10 yuan
Stamp duty 0.2%of the trading value
A share and
Historical funds
Transfer fee 0.1% of the par value, no less than 1 yuan
Securities investment
fund
Commission 0.25% of the trading value, no less than 5 yuan
Bonds(T-bonds,debentures and convertible bonds)
Commission No more than 0.2% of the trading value, no less than 5 yuan
0.015% of the trading value (3 days)
No more than 0.025% of the trading value(7 days)
No more than 0.05% of the trading value(14 days)
No more than 0.1% of the trading value(28 days)
T-bond repo Commission
No more than 0.15% of the trading value(above 28 days)
Commission 0.43% of the trading value
Stamp duty 0.2% of the trading value
B share /B share warrants
Clearing 0.05% of the trading value
Paper card for individual
40 yuan per account
Magcard for individual Local: 40 yuan per account; non-local: 70 yuan per account
Accounts for securities investment fund
5 yuan per account
Account opeing for A share
trading
Accounts for institutional investors
400 yuan per account
Transfer for lost accounts
Handling charge 10 yuan per account
Write-off accounts
Handling charge 5 yuan per account
Shareholder info 5 yuan per account
Balance 20 yuan per account
Inquiry
Trading record Individual: 20 yuan; Institutional: 50 yuan
Non-trading Commission 10 yuan per transaction
Transfer fee 0.1% par value for both parties starting from 1 yuan for individuals and 10 yuan for institutional investors
transfer
Stamp duty Charge on both parties 0.2% of the trading value based on current date open price (non-traded transferred shares based on 1 yuan par value ),excluding bonds and funds
Below 5 mil. shares: 0.1% of the par value(two-side); at or above 5 mil. shares; 0.010% of the par value for the shares above 5 mil.(two-side)
Transfer on agreement
Stamp duty: 0.4% of the total transferred share price (two-side)
Account Transfer of
Legal Person Shares
Change of legal person, transfer for shutting-ups
Handling charge: 100 yuan
Registration for Securities
Impawn
Below 5 mil. shares: 0.1% of the par value of impawned shares starting from 100 yuan;
Below 5 mil. shares（incl. ），0.01% of the par value for the shares above 5 mil.
Individual 15 US dollars Account opening for B share trading Institutionals 75 US dollars
B Share Warrants
Trading 0.1% of the par value of traded shares
Transfer fee 30 US dollars per trade Non-trading transfer for B
Shares Amendment of trading orders
30 US dollars per trade
Custodian banks 8 US dollars for each trade, maximum 24 US dollars for each order
Foreing Agents 4 US dollars for each trade, maximum 24 US dollars for each order
Clearing fee for B shares
Domestic Agents 1 US dollars for each trade, maximum 24 US dollars for each order
The accumulative trading value of the 20 most active stocks reached 245.99 billion RMB,
accounting for 10.83% of the total 2270.94 billion RMB. Founder Tech ranked first for the second year.
Rank Code Stock Trading value
(ten thousand RMB)
Percentage of the total
1 600601 Founder Tech 2099525.31 0.92
2 600019 Baosteel 1623955.90 0.71
3 900949 Southeast Power B 1610849.34 0.71
4 600104 Shanghai Auto 1544948.71 0.68
5 600016 Minsheng Bank 1530810.02 0.67
6 900932 Lujiazui B 1449968.86 0.64
7 600037 Gehua CATV 1400964.76 0.62
8 900908 Chlor Alkai B 1265966.67 0.56
9 600098 Guangzhou Dev 1128103.40 0.50
10 600028 China Petrochemical 1051853.06 0.46
11 600603 Xing Ye Estate 1035256.99 0.46
12 600839 Changhong Elec 1035226.36 0.46
13 600006 Dongfeng Automobile 1028529.02 0.45
14 600690 Qingdao Haier 1011840.53 0.45
15 600198 Datang Telecom 995071.10 0.44
16 900937
Heilongjiang Electric Power B 983620.03 0.43
17 600186
Lianhua Gourmet Powder 978097.95 0.43
18 600266 Beijing Urban Construction 973100.93 0.43
19 600663 Lujiazui 933574.87 0.41
20 600263 CRBC Int 918110.99 0.40
20 Most Active Stocks by Trading Volume
In 2001, 29.82 billion shares of the 20 most active stocks were traded, representing 16.38% of the
total 181.995 billion shares. Baosteel ranked the first.
Rank Code Stock Trading volume
(ten thousand RMB)
Percentage of the total
1 600019 Baosteel 304631.95 1.67
2 600028 China Petrochemical 260627.18 1.43
3 900949 Southeast Power B 244242.97 1.34
4 900908 Chlo Alkai B 204597.40 1.12
5 900932 Lujiazui B 187929.81 1.03
6 900946 Qingqi Motorcycle B 174701.50 0.96
7 600104 Shanghai Auto 150897.40 0.83
8 900902 Shanghai Erfangji B 141929.62 0.78
9 900953 Worldbest Kama B 140702.42 0.77
10 900937
Heilongjiang Electric Power B 135324.28 0.74
11 900909 Tire B 109593.72 0.60
12 600006 Dongfeng Automobile 109136.81 0.60
13 900948 Yitai Coal B 107845.41 0.59
14 600010 Steel Union 105005.60 0.58
15 600871
Yizheng Chemical Fiber 104483.02 0.57
16 900920
Shanghai Diesel Engine B 104349.78 0.57
17 900940 Worldbest B 102284.66 0.56
18 600839 Changhong Elec 98950.11 0.54
19 900950 Xincheng B 98578.18 0.54
20 900901 SVA Electron B 96057.58 0.53
Top 20 Advancers
In 2001, domestic investors were allowed to participate in the B share market. Shanghai’s B share
market surged greatly and the top 20 advancers were all B shares.
Rank Code Stock Close in 2000 Close in 2001 Up %
1 900948 Yitai Coal B 0.360 0.895 148.61
2 900910 Shanghai Highly B 0.444 1.060 138.74
3 900951 Dalian Chemical B 0.370 0.844 128.11
4 900953 Worldbest Kama B 0.362 0.811 124.03
5 900955 Shanghai Matsuohua B 0.760 1.700 123.68
6 900956 Dongbei Electrical B 0.380 0.850 123.68
7 900950 Xincheng B 0.362 0.804 122.10
8 900902 Shanghai Erfangji B 0.350 0.752 114.86
9 900916 Phoenix Bicycle B 0.474 1.017 114.56
10 900933 Huaxin Cement B 0.370 0.792 114.05
11 900936 Erdos Cashmere B 0.530 1.130 113.21
12 900908 Chlo Alkai B 0.360 0.756 110.00
13 900904 Shanghai Wingsong B 0.574 1.199 108.89
14 900924 Shanghai Industrial B 0.456 0.949 108.11
15 900923 Friendship B 0.540 1.113 106.11
16 900927 Goods and Material B 0.494 1.014 105.26
17 900906 ST CH Text Mach-B 0.356 0.727 104.21
18 900913 Lianhua B 0.576 1.171 103.30
19 900921 Hero B 0.460 0.932 102.61
20 900922 Sanmao Textiles B 0.578 1.147 98.44
Top 20 Decliners
Rank Code Stock Close in 1999 Close in 2000 Down %
1 600756 Langchao Soft 40.800 18.160 -55.49
2 600795 Guodian Power 35.180 15.550 -55.80
3 600216 Zhejiang Medical 18.100 7.980 -55.91
4 600790 Textile City 15.150 6.650 -56.11
5 600121 Zhengzhou CoalElec 24.000 10.510 -56.21
6 600061 Sinotex Investment 20.600 8.990 -56.36
7 600726 Heilongjiang Power 16.490 7.190 -56.40
8 600825 Hualian Supermarket 30.990 13.430 -56.66
9 600733 Qingfeng Co 28.650 12.390 -56.75
10 600621 Shanghai Jinling 17.050 7.240 -57.54
11 600193 Chuangxing Tech 26.900 10.910 -59.44
12 600895 Zhangjiang Hi-Tech 34.720 13.990 -59.71
13 600746 Jiangsu Sopo 28.440 11.170 -60.72
14 600738 Lanzhou Minbai 20.700 7.740 -62.61
15 600183 Shengyi Tech 25.430 9.140 -64.06
16 600651 Fello Acoustics 43.000 14.390 -66.53
17 600202
Harbin Air Conditioning 31.280 10.380 -66.82
18 600800 Tianjin Magnetic Card 24.290 7.890 -67.52
19 600071 Phoenix Optical 24.400 7.330 -69.96
20 600700 Digital Surveying 29.990 7.800 -73.99
Market Values and Weights of Sample Shares in the SSE 30 Index (as of the end of 2001)
Code Stock No.of outstanding shares
（tens of thousands）
Outstanding Value
（ tens of thousands of
RMB）
Close price
(RMB)
% of the 30 Index
600001 Handan Steel 49000 298410 6.09 3.43
600002 Qilu Petrochem 35000 151900 4.34 1.74
600009 Shanghai Airport 51230 429305 8.38 4.93
600058 Minmetals 12000 237480 19.79 2.73
600068 Gezhouba 34580 246901 7.14 2.83
600072
Jiangnan Heavy Industry 12480 115690 9.27 1.33
600098 Guangzhou Dev 23400 358254 15.31 4.11
600100 Qinghua Tongfang 24761 499427 20.17 5.73
600104 Shanghai Auto 75600 554904 7.34 6.37
600115
China Eastern Airlines 30000 136800 4.56 1.57
600631 No. 1 Dept 18831 161759 8.59 1.86
600642 Shenergy Co 25099 331811 13.22 3.81
600643 AJ Co 30835 316678 10.27 3.64
600649 Raw Water Sup 56085 425125 7.58 4.88
600663 Lujiazui 16052 230994 14.39 2.65
600688 Shanghai Pechem 72000 262800 3.65 3.02
600690 Qingdao Haier 44990 716236 15.92 8.22
600702 Top-up Yeast Liquor 14862 139701 9.40 1.60
600718 Alpine Soft 11326 241693 21.34 2.78
600727 Lubei Chemical 15210 200012 13.15 2.30
600736 Suzhou New Hi-Tech 15093 138403 9.17 1.59
600776 Eastern Comms 11800 202488 17.16 2.32
600811 Orient Co 40180 312196 7.77 3.58
600812 N. China Pharm 46927 250120 5.33 2.87
600839 Changhong Elec 95140 745899 7.84 8.56
600854 Chunlan Co 19824 254344 12.83 2.92
600867 Tonghua Dongbao 15770 131520 8.34 1.51
600868 Mei Yan 77624 373371 4.81 4.29
600886 Hubei Xinghua 10732 86283 8.04 0.99
600887 Yili Industrial 7989 158989 19.90 1.83
Explanation of the Compilation of the Shanghai Index The Shanghai Index series compiled and published by the SSE includes the Shanghai 30, Shanghai Composite Index, A Share Index, B Share Index, Category Index and Fund Index, the earliest of which to be compiled was the Shanghai Composite Index. In July, 1996, the SSE, drew reference from common international practices and selected the most representative 30 shares as sample shares according to the five principles of representative nature of the industry, scale of liquid market capitalization, degree of trading, financial status and operating results as well as conformity to the developmental policies of the state economy and complied the Shanghai 30. The Shanghai Index series reflects the changes in SSE listed stock prices from an overall view and various different aspects, the level of prosperity of different industries and overall changes in the price of their shares. This provides investors with different portfolio tracking analysis tools. Following the securities market’s increasingly important position in the national economy, the Shanghai Index will also gradually become a “barometer” to observe the operation of the Chinese economy. In order to ensure the scientific nature of the compilation of indices, openness of index adjustment and fair selection of sample shares, the SSE specially established an index compilation working group to be responsible for the design and management of indices. At the same time, it engaged domestic and foreign experts to provide consultative opinions regarding the index compilation methods, selection of sample shares etc. Index Series The SSE share price index series has a total of 10 indices in 4 categories. Category 1: Sample share category (1) The SSE 30 Index Category 2: Composite Index (2) The SSE Composite Index (3) The SSE A Share Index (4) The SSE B Share Index Category 3: Classified Indices (5) The SSE Industrial Index (6) The SSE Commercial Index (7) The SSE Property Index (8) S The SSE Public Utility Index (9) The SSE Comprehensive Index Category 4: Other stock indices (10) The SSE Fund Index Method of Calculation The Shanghai Index series all use “points” as the unit of measurement.
(I) Base day, base period (divisor) and base period index
1. The SSE 30 takes the average liquid market capitalization from January to March 1996 as base period, the base period index being set at 1,000 points. The index has been officially published since July 1, 1996.
2. The SSE Composite Index takes December 19, 1990 as base day and the total market value of all stocks on that day as base period. The base period index is set as 100 points and has been officially published since July 15, 1991.
3. The SSE A Share Index takes December 19, 1990 as base day and the total market value of all A Shares as base period. The base period index is set as 100 points and has been officially published since February 21, 1992.
4. The SSE B Share Index takes on February 21, 1992 as base day and the total market value of all B Shares as base period. The base period index is set as 100 points and has been officially published since February 21, 1992.
5. The Classified indices take April 30, 1993 as base day and the total market value of all stocks of the corresponding industries on that day as base period. The base period index is uniformly set as 1,358.78 points (the closing value of the SSE Composite Index on April 30, 1993). The index has been officially published since June 1, 1993.
6. The SSE Fund Index takes May 5, 2000 as base day and the total market value of securities investment funds on that day as base period. The base period index is set as 1,000 points and has been officially published since May 9, 2000.
(II) Computational Formula
1. The Shanghai Index series are all calculated using a Passche weighted composite price index calculation, i.e. using the share capital of sample stocks during the reporting period as the weighted number to calculate total market value and carry out weighting calculation.
Reporting Period Index = (reporting period sample shares’ total market value/base period) x base period index
2. Index Weighting
(1) The SSE 30 Index
Share equity is calculated according to quantity of floating sample shares; Total market value is the floating market value; Of which, liquid market capitalization = ∑ (market price x quantity of floating stock).
(2) The SSE Composite Index and Classified Indices The quantity of share capital is taken from the number of sample shares issued; Overall total market value is overall value of market prices; Of which, total market value =∑ (market price x number of shares issued).
3. B Share Price Unit
When calculating the SSE B Share Index, the B shares among the sample shares are calculated in US dollars. When calculating other indices, the price of B Shares among sample shares is calculated according to the applicable exchange rate (the middle price of RMB into US dollars on the last trading day of the week at the China Foreign Exchange Trading Center) converted into RMB. Method of Adjustment The SSE Index series all adopt the “Divisor Adjustment” method. When changes occur to the list of sample shares, changes occur to the share capital structure of sample shares or there are non-trading related fluctuations to the total market value of sample shares (total market value or liquid market capitalization), the previous trading day prior to the change is taken as the new base day and the “Divisor Adjustment” methods is used to adjust the former fixed divisor so as to ensure the consistency of the indices. The adjustment formula is: Pre-adjustment total market value/original divisor = post-adjustment total market value/new divisor. Of which, post-adjustment total market value = pre-adjustment total market value + newly increased (decreased) market value; The formula thereby finds a new divisor (i.e. the post-adjustment divisor, also called the new base period) and calculates the subsequent indices on this basis.
1. Suspension of trading - When some A or B Shares suspend trading, the index is calculated as usual; When trading in all A and B Shares is suspended, calculation of the index is terminated.
2. Suspended trading - When trading of a certain sample share is suddenly suspended during trading time, it final closing rate is used to calculate the indices until closing of the day’s trading.
3. Trading suspended - When trading of a certain sample share is suspended temporarily, no adjustment is made and the previous trading day’s closing price of the suspended stock is used to directly calculate the indices. If trading is suspended for more that 2 hours, rights are withdrawn and resumed after the resumption of trading.
4. Share changes - The share capital structure of listed companies is calculated and published every month by the Registration and Clearing Company.
In the case of the SSE 30 Index: If there is a change of 1% in the overall quantity of a sample share’s floating stock compared to the accumulative total following the last adjustment, adjustment must be made to the index; If a single change of the quantity of floating capital of a sample stock reaches 5%, adjustment must be made to the index. No adjustment is generally made for other relatively minor fluctuations. In the case of the SSE Composite Index and Classified Index: If there is a change reaching 1% in the total number of shares issued of a sample share compared to the accumulative total following the last adjustment, adjustment must be made to the index; If a single change of the number of shares issued of a certain sample stock reaches 5%, adjustment must be made to the index. No adjustment is generally made for other relatively minor fluctuations.
5. New listings - In the case of newly listed sample shares, adjustment is made of the index
at the close of the first day’s trading after listing and they are calculated into the index. 6. Removal - In the case of a sample stock being removed (trading terminated) an
adjustment is made to the index according to the previous trading day’s closing quotation of the removed stock.
7. Ex dividend - In the case of sample stocks being ex dividend (granting of stock dividends), no adjustment is made to the index and it is allowed to fallback naturally.
8. Ex rights - In the case of sample stocks being ex rights (share dividends and share offers), the index is modified prior to the opening of trading of the ex rights trading day of index stocks.
The SSE 30 Index: Post-adjustment total market value = ex rights quoted price x quantity of floating stock following ex rights + pre-adjustment total market value (not including ex rights stock); The SSE Composite Index and Classified Index: Post-adjustment total market value = ex rights quoted price x number of shares issued following ex rights + pre-adjustment total market value (not including ex rights stock). 9. Withdrawal of rights - When transferring and placing sample shares occurs, the stock is
temporarily removed from index calculation from the ex rights trading day. 10. Resumption of rights - From the 11th trading day after the rights of placed sample shares
are withdrawn and circulated on the market, they are again calculated within the index. 11. Changes in exchange rates - The index is adjusted according to the middle price of RMB
to the US dollar at the China Foreign Exchange Trading Center on the last trading day of every trading week.
Publishing of the Index The SSE Index series are released to the domestic and foreign public through a variety of means. They are broadcast nationwide via the SSE’s real time satellite broadcast system. They are broadcast real-time globally via Reuters Financial Information System, Bridge Financial Information System, and Bloomberg Financial Information System. The indices are also published in the SSE’s “Daily Market Quotations” published daily, “Weekly Market Quotations” published weekly and “Shanghai Securities Monthly Market Statistics” published monthly. The indices are also published daily via the Internet at the website: http://www.sse.com.cn The indices are transmitted every day following closing via the exchanges “message handling system” in the form of an “ E-Report” to a variety of media including “China Securities News”, “Shanghai Securities News” and “Securities Times”.
SSE 30 Index in 2001
SSE 30 Index Movements（2001.1-2001.12）
05
10152025303540
2001-1-2
2001-1-17
2001-2-15
2001-3-2
2001-3-19
2001-4-3
2001-4-18
2001-5-10
2001-5-25
2001-6-11
2001-6-26
2001-7-11
2001-7-26
2001-8-10
2001-8-27
2001-9-11
2001-9-26
2001-10-18
2001-11-2
2001-11-19
2001-12-4
2001-12-19Dai
ly T
urno
ver i
n Va
lue（
100
mil.
Yuan
)
050010001500200025003000350040004500
SSE
30 In
dex
日成交金额(亿元）
上证30指数
Historical Movement of SSE 30 Index
SSE 30 Index Historical Movements（1996.7-2001.12）
0
50
100
150
200
250
300
350
400
1996-7-5
1996-10-4
1997-1-3
1997-4-18
1997-7-18
1997-10-17
1998-1-16
1998-5-1
1998-7-31
1998-10-30
1999-1-29
1999-5-14
1999-8-13
1999-11-26
2000-3-10
2000-6-16
2000-9-15
2000-12-22
2001-4-6
2001-7-6
2001-10-12
Dai
ly T
urno
ver i
n Va
lue（
100
mil.
yuan）
050010001500200025003000350040004500
SSE
30
Inde
x
周成交金额(亿元）上证30指数
SSE Composite Index in 2001
SSE Composite Index Movements（2001.1-2001.12）
050
100150200250300350400
2001-1-2
2001-1-17
2001-2-15
2001-3-2
2001-3-19
2001-4-3
2001-4-18
2001-5-10
2001-5-25
2001-6-11
2001-6-26
2001-7-11
2001-7-26
2001-8-10
2001-8-27
2001-9-11
2001-9-26
2001-10-18
2001-11-2
2001-11-19
2001-12-4
2001-12-19D
aily
Tur
nove
r in
Valu
e (1
00m
il. y
uan)
0
500
1000
1500
2000
2500
SSE
Com
posi
te In
dex
日成交金额(亿元）
上证指数
Historical Movement of SSE Composite Index
SSE Composite Index Historical Movements（1990.12-2001.12）
0
500
1000
1500
2000
2500
3000
1990-12-21
1991-7-5
1992-1-3
1992-7-3
1993-1-1
1993-7-2
1993-12-31
1994-7-8
1995-1-6
1995-7-14
1996-1-12
1996-7-26
1997-1-24
1997-8-8
1998-2-20
1998-8-21
1999-3-5
1999-9-3
2000-3-31
2000-10-13
2001-4-27
2001-11-2
Dai
ly T
urno
ver i
n Va
lue（
100
mil.
yua
n）
0
500
1000
1500
2000
2500
SSE
Com
posi
te In
dex
周成交金额(亿元）
上证指数
Market Values and Weights of Sample Shares in the SSE 30 Index (as of the end of 2001)
Code Stocks No.of outstanding
shares
（ten thousand
RMB）
Outstanding
Value
（ten thousand
RMB）
Close price
(RMB)
% of the 30
Index
600001 Handan Steel 49000 298410 6.09 3.43
600002 Qilu Petrochem 35000 151900 4.34 1.74
600009 Shanghai Airport 51230 429305 8.38 4.93
600058 Minmetals 12000 237480 19.79 2.73
600068 Gezhouba 34580 246901 7.14 2.83
600072
Jiangnan Heavy Industry 12480 115690 9.27 1.33
600098 Guangzhou Dev 23400 358254 15.31 4.11
600100 Qinghua Tongfang 24761 499427 20.17 5.73
600104 Shanghai Auto 75600 554904 7.34 6.37
600115 China Eastern Airlines 30000 136800 4.56 1.57
600631 No. 1 Dept 18831 161759 8.59 1.86
600642 Shenergy Co 25099 331811 13.22 3.81
600643 AJ Co 30835 316678 10.27 3.64
600649 Raw Water Sup 56085 425125 7.58 4.88
600663 Lujiazui 16052 230994 14.39 2.65
600688 Shanghai Pechem 72000 262800 3.65 3.02
600690 Qingdao Haier 44990 716236 15.92 8.22
600702 Top-up Yeast Liquor 14862 139701 9.40 1.60
600718 Alpine Soft 11326 241693 21.34 2.78
600727 Lubei Chemical 15210 200012 13.15 2.30
600736 Suzhou NewHi-Tech 15093 138403 9.17 1.59
600776 Eastern Comms 11800 202488 17.16 2.32
600811 Orient Co 40180 312196 7.77 3.58
600812 N. China Pharm 46927 250120 5.33 2.87
600839 Changhong Elec 95140 745899 7.84 8.56
600854 Chunlan Co 19824 254344 12.83 2.92
600867 Tonghua Dongbao 15770 131520 8.34 1.51
600868 Mei Yan 77624 373371 4.81 4.29
600886 Hubei Xinghua 10732 86283 8.04 0.99
600887 Yili Industrial 7989 158989 19.90 1.83
Listed Companies
Conditions for Listing According to the regulations of the “Securities Law of the People’s Republic of China” and “Company Law of the People’s Republic of China”, limited companies applying for the listing of shares must meet the following conditions: The shares must have been publicly issued following approval of the State Council Securities Management Department. The company’s total share capital must not be less than RMB 50 million. The company must have been in business for more than 3 years and have main profits over the last three consecutive years. In the case of former state-owned enterprises re-established according to the law or founded after implementation of the law and if their issuers are large and medium state owned enterprises, it can be calculated consecutively. The number of shareholders with holdings of values reaching in excess of RMB 1,000 must not be less than 1,000 persons. Publicly offered shares must be more than 25% of the company’s total share capital. For company’s whose total share capital exceeds RMB 400 million, the ratio of publicly offered shares must be more than 15%. The company must not have been guilty of any major illegal activities or false accounting records in the last three years. Other conditions stipulated by the State Council. The conditions for applications for the listing o shares by limited companies involved in high and new technology are set out separately by the State Council.
Listing Procedures The applications of limited liability companies for the listing of their shares are subject to the following procedures: CSRC approval. The applications of companies for the listing of their shares are subject to the approval of the China Securities Regulatory Commission approval; Submission of listing application documents. Only after gaining the approval of the CSRC, can the company make an application for listing to the SSE and submit the listing application documents required by the SSE. Share custody. Before a company’s shares can be listed and trading commenced, it must entrust its full register of shareholders to the Shanghai Branch of the China Securities Registration and Clearing Co., Ltd. Determination of the date of listing: Publish a listing notice. Following examination and verification of the SSE, the company must publish a listing notice 5 days prior to the listing and trading of its shares. Listing and trading.
Documents to be Submitted when Applying for Listing According to the provisions of the “Securities Law of the People’s Republic of China”, limited liability companies must submit the following documents when making an application for the listing of their shares to the Securities Supervisory Institutions of the State Council:
1. Listing Announcement; 2. General meeting of shareholders resolution to apply for listing; 3. Company Ordinance; 4. Company business license; 5. Financial accounting materials for the last three years or since the founding of the
company following verification by legal verification organization; 6. Legal opinions in writing and a letter of recommendation from a securities company; 7. The most recent share prospectus.
In addition, companies must submit the following related documents according to the provisions of the Exchange’s rules for the listing of shares:
1. Listing Application; 2. Documents from the CSRC approving its share issue and issue and listing declarations
approved by the CSRC; 3. Newly added financial materials as required following issue of the share; 4. Photocopy of its business license; 5. Personal particulars of the secretary of the board of directors and contact details of the
secretary of the board of directors, securities representative and legal representative; 6. Report regarding the shareholdings of the company directors, supervisors and senior
management of the company; 7. Circular determining the listing abbreviation of the company’s stock; 8. Documentation showing the full custody of the company’s stock; 9. A written pledge of the company’s largest shareholder pledging not to sell or repurchase
its shareholding for a period of twelve months. 10. Other documents required by the Exchange.
Conditions for Share Placements The company must have a sound legal person administrative structure, separate in terms of personnel and finance from the legal persons or other organizations and affiliated enterprises that have working control over it. It must ensure the independence of the listed company’s personnel, asset integrity and financial autonomy. The company’s ordinance must conform to the provisions of the “Company Law” and “Directions for the Articles of Listed Companies”. The notification of general meeting of shareholders, method of convening, voting and passing of resolutions must conform to the “Company Law” and other relevant provisions. The use of capital raised through the placing of shares must conform to the provisions of the Nation industrial policy. In principle, the amount of capital raised must not exceed the amount of financing requirements
approved by the general meeting of shareholders of the company for planned investment projects. There must be no instances of the holding of capital or assets by individuals, legal persons or other organizations and their associates or other major associated dealing that damages the interests of the company. The average weighted average net assets earning rate of the company over the last 3 financial years must not be less than 6% as verified by certified public accountant; The lower of either net profits after deduction of non recurrent net profits and loss or net profits before deduction is taken as the basis for calculation of the weighted average net assets earning rate. In cases where the company has been established less than 3 financial years, the calculation is made according to the financial year following the establishment of the company. In principle, the total number of a one-off share placement by a company must not exceed 30% of share capital of the previous share issue. If the company has a shareholder with working control offering to buy all placed stock, it is not subject to the above proportional limits. Each placement must be not less than 1 financial year from the previous share placement. If a company engages in major purchases or disposal of assets and securities, it must conform to the relevant regulations of CSRC.
Special Treatment When abnormal circumstances occur in a company’s financial or other status making it difficult for investors to judge the future of the company and resulting in the possibility of compromising investors’ interests, the company will be subject to the following special treatment:
11. The letters “ST” are placed before the abbreviation of the company’s stock to differentiate it from other shares.
12. A daily rise and fall restrictions of 5% are placed on the company’s stock. It is considered an abnormal financial status when any of the following occur to a listed company: When the net profits of the latest audit result of two financial years are negative values; When the latest audit result of a financial year reveals the stockholders’ equity lower than registered capital i.e. net assets per share are lower than the face value of the share; When a certified public accountant is unable to present an opinion or presents a negative opinion regarding the financial report of the last financial year; When the part of audited stockholders’ equity deducted and not validated by a certified public accountant in the last financial year is lower than registered capital; When on the last audited financial report adjustment is made of the previous year’s profits, resulting in losses over two consecutive financial years; Other circumstances determined by the Exchange of the CSRC as abnormal financial circumstances. It is considered an abnormal situation when any of the following occur to a listed company: Natural disasters, major accidents and other causes resulting in the company’s main operational facilities suffering a loss, the production and operating activities of the company basically
suspended and the situation irrecoverable within 3 months. The company is involved in a lawsuit or arbitration where it is liable for damages and where according to the legal documents of the court or arbitration body, the total claimed amount exceeds 50% of the listed company’s value of audited net assets. The company’s main bank account is frozen, affecting the company’s normal business activities. Other abnormal circumstances occur in the company where the board of directors believes that it is necessary to apply for special treatment. The People’s Court receives the case for the company’s insolvency where the listed company might be declared legally insolvent. Where the company’s board of directors is unable to normally convene a meeting and form resolutions of the board of directors. The company’s main debtor is called into bankruptcy proceedings by the court, sufficient bad debt reserves cannot be set aside for the company’s corresponding creditor’s rights and where the company faces major financial risks. Other circumstances the CSRC or SSE determines as abnormal. After the listed company financial status returns to normal or other abnormal circumstances are resolved, it can apply to the Exchange for the revocation of special treatment. Applications for the revocation of special treatment after the return to normal of financial status must satisfy the following conditions:
1. Its main business is operating normally; 2. The net profits after deduction of non-recurrent profit and loss of the last year are a
positive value. The Exchange will make a decision as to whether to revoke special treatment according to the actual conditions of the company.
Temporary Suspension of Trading and Cessation of Listing When any of the following circumstances occur to a company, its shares will be temporary suspended from trading: When changes occur to the company’s total share capital, stock equity distribution etc. making it no longer eligible for listing; Where the company does not disclose its financial status as required or is guilty of false recording of financial accounting reports; The company has committed a major violation; The company has recorded a loss over three consecutive years. When any of the circumstances detailed under items 1, 2 and 3 above occur to a company, the Exchange will temporarily suspend the trading of its shares according the decision of the CSRC. When the circumstances detailed under item 4 above occur to a company, the Exchange will make the decision to temporarily suspend the trading of the company’s shares. When any of the following circumstances occur to a company, its shares will be de-listed:
1. When following temporary suspension due to items 2 and 3, investigation reveal the
consequences to be serious; 2. When following temporary suspension due to items 1 and 4 above, investigation reveal
the consequences to be serious and where the company is not eligible for listing and where the reason for the temporary suspension of trading cannot be resolved within the time prescribed by the administrative organs of the State’s supervisory organizations;
3. Where the company has broken up, been legally forced to close by competent administrative authorities or where it is declared bankrupt.
On November 30, 2001, CSRC released the “Implementation Measures for the Temporary Suspension of Trading and Cessation of Listing of Loss-making Listed Companies (revised)”. According to these measures, the stock exchange makes a legally-based decision to temporarily suspend or cease the trading of the stocks of listed companies that have reported sustained losses.
Listing Agreement The Listing Agreement is an agreement signed between the Exchange and the listed company prior to the company’s stock being listed and traded. It principally includes the following: The stock exchange provides trading facilities and convenient service for the trading of the company’s securities. Listed company undertakes to abide by relevant state securities laws, rules and regulations and related rules of the Exchange. The listed company and its directors, supervisors and officers undertake to accept the supervision of the stock exchange and be subject to sanctions by the stock exchange for any violations in accordance with the law. Listing fee and its method of payment. The Exchange can cease the trading of listed securities in accordance with the law. If the Exchange determines that a company’s securities no longer meet the conditions for listing, it can temporarily suspend or cease the listing of such securities.
Listing Fees
A shares B shares
Initial fees 0.03% of the total share capital；
below 30,000 yuan
0.1% of the par value of listed
shares，below 5000 US dollar
Monthly fees 0.001% of the par value of
listed shares； maximum not
exceeding 500 yuan
50 US dollars
Sector Distribution of Companies Listed
Year Industrial Commercial Property Public Utilities Miscellaneous Total
1991 3 2 0 0 3 8
1992 20 3 1 1 4 29
1993 63 14 8 11 10 106
1994 93 34 9 15 20 171
1995 109 34 9 12 24 188
1996 164 46 9 22 52 293
1997 218 50 9 33 73 383
1998 257 49 9 38 85 438
1999 291 49 9 39 96 484
2000 347 54 9 50 112 572
2001 402 56 13 59 116 646
Geographical Distribution of Listed Companies
Region Companies listed Percentage
Companies listed
in 2001 Percentage
Shanghai 130 20.12 3 4.00
Zhejiang 43 6.66 2 2.67
Jiangsu 41 6.35 6 8.00
Beijing 41 6.35 8 10.67
Shandong 34 5.26 4 5.33
Liaoning 31 4.80 7 9.33
Hubei 30 4.64 3 4.00
Sichuan 28 4.33 2 2.67
Fujian 24 3.72 1 1.33
Heilongjiang 22 3.41 1 1.33
Jilin 18 2.79 2 2.67
Inner
Mongolia 18 2.79 8 10.67
Xinjiang 15 2.32 1 1.33
Henan 15 2.32 2 2.67
Shanxi 15 2.32 2 2.67
Chongqing 13 2.01 5 6.67
Hebei 12 1.86 1 1.33
Yunnan 12 1.86 1 1.33
Guangdong 11 1.70 0 0.00
Anhui 11 1.70 2 2.67
Tianjin 10 1.55 0 0.00
Hainan 9 1.39 2 2.67
Hunan 9 1.39 2 2.67
Gansu 8 1.24 1 1.33
Jiangxi 8 1.24 1 1.33
Shanxi 8 1.24 4 5.33
Qinhai 8 1.24 0 0.00
Guangxi 7 1.08 2 2.67
Tibet 6 0.93 1 1.33
Guizhou 6 0.93 1 1.33
Ningxia 3 0.46 0 0.00
Newly listed shares in 2001
By the end of 2001, 690 shares had been listed on the SSE, 76 more than that of the
corresponding period in the previous year. Among this, there were 636 A shares and 54 B shares. The
number of listed companies had risen 12.94% to 646. The total number of issued shares incrased
55.70% to 316.444 billion, among which 83.753 billion were outstanding shares, 29.05% over that of
2000. Up to the end of 2000, the total market price and outstanding values reached 2.759.056 billion
RMB and 838.211 billion RMB respectively.
Code Stock Category Issue price
(RMB) Date of listing Open (RMB) Close (RMB)
600010 Steel Union industrial 5.180 20010309 6.800 6.400 600011 Huaneng
International
industrial 7.950 20011206 13.300 13.640
600028 China Petrochemic
al
industrial 4.220 20010808 4.600 4.360
600033 Fujian Expressway
Public Utilities
6.660 20010209 8.780 8.850
600037 Gehua CATV
Miscellaneous
15.500 20010208 32.000 28.450
600250 Nanjing Textiles
Commercial 8.120 20010306 17.110 17.180
600272 Kaikai Industry
industrial 9.600 20010228 14.900 15.780
600295 Eerkuosi Cashmere
industrial 16.800 20010426 22.160 22.230
600305 Hengshun Vinegar
industrial 7.100 20010206 16.800 15.920
600309 Yantai Wanhua
industrial 11.280 20010105 28.000 31.000
600310 Guidong Power
Public Utilities
8.800 20010228 18.200 17.700
600311 Ronghua Industrial
industrial 8.600 20010626 19.980 20.510
600312 Pinggao Electric
industrial 12.450 20010221 18.890 19.450
600313 Zhongken Agricultural
Resource
Miscellaneous
6.300 20010119 12.820 14.250
600315 Shanghai Jahwa
industrial 9.180 20010315 17.000 17.000
600319 Yaxing Chemical
industrial 9.200 20010326 16.880 16.480
600321 Guodong Constructio
n
industrial 12.280 20010524 30.000 25.790
600322 Tianfang Dev
Property 5.000 20010910 10.280 11.680
600326 Tibet Tianlu Public Utilities
6.880 20010116 18.230 19.020
600329 Zhongxin Pharma
industrial 10.000 20010606 28.470 28.000
600330 Tiantong Co industrial 8.990 20010118 28.000 27.700
600331 Hongda Co industrial 9.180 20011220 16.470 14.950 600332 Guangzhou
Pharma industrial 9.800 20010206 13.000 14.700
600335 China Constructio
n Dev
industrial 6.000 20010305 18.870 18.270
600346 Binshan Rubber
industrial 5.360 20010820 19.800 19.050
600356 Hengfeng Paper
industrial 7.090 20010419 25.010 28.960
600360 Sino-Microelectronics
industrial 8.420 20010316 22.010 23.690
600361 Beijing Hualian
Commercial 7.900 20011129 15.810 17.300
600363 Liangchuang
Photoeletron
industrial 6.660 20010329 23.000 24.000
600365 Tonghua Grape Wine
industrial 7.080 20010115 15.580 14.450
600367 Hongxing Dev
industrial 12.660 20010320 36.060 37.910
600369 Changjiang Transport
Co
Public Utilities
6.180 20010109 14.500 15.280
600372 Changhe Co industrial 7.280 20010706 12.800 13.850 600376 Tianhong
Asset Restructuring of Listed Companies In 2001, the asset restructuring of listed companies was still vigorous and listed companies with the concept of asset restructuring were still the focus of the market, however due to relatively major changes in the market environment, asset restructuring in 2001 revealed some new characteristics. Underperforming stocks still took the leading role in restructuring. On February 22, 2001, CSRC released the “Implementation Measures for the Temporary Suspension of Trading and Cessation of Listing of Loss-making Listed Companies” meaning that a large number of poorly performing companies now face a “countdown” to de-listing. This forced poorly performing companies to strengthen the efforts to restructure. Methods of asset restructuring became more diversified. In 2001, some new methods of restructuring emerged such as stock equity auctions, custody before sale, and acquisition by company management etc. The degree of standardization of asset restructuring is increasingly high. In 2001, the Ministry of Finance issued the new “Enterprise Accounting System” and also revised a number of accounting standards such as “Non-monetary Transactions” and “Debt Restructuring”. The new accounting policy greatly reduced the scope for the adjustment of profits through asset restructuring. On December 10, 2001, CSRC released the “Notice regarding a number of Problems including the Major Purchase, Sale and Transfer of Assets by Listed Companies” which further strengthened the force of major asset restructuring. There was a further development trend toward acquisitions through foreign capital. In November, 2001, CSRC and the Ministry of Foreign Trade and Economic Cooperation jointly released “Various Opinions Regarding Foreign Investment in Listed Companies” to create a new environment for the entry of foreign capital to the domestic market and the participation in the asset restructuring of listed companies. In 2001, Alcatel (France) indirectly became the second major shareholder of “Shanghai Belling” through its proprietary of Shanghai Bell.
Observing the secondary market, individual asset restructuring stocks are still the most active segment in the market. However, in 2001, the market for restructured stocks no longer performed like an integral inter-driven segment but rather is gradually developing and evolving towards the characteristics of individual stocks. Furthermore, on the whole, the performance of restructured individual stocks was closely related to the index of the main board. When the main board rises, the rise of restructured individual stocks is greater than the main board. When the main board falls, the decline of restructured individual stocks is also greater than the main board. In 2001, restructured stocks fully displayed “High Risk” market characteristics.
Bond Market
Summary 2001 was a year of great development of the Shanghai Stock Exchange bond market. In 2001, the Ministry of Finance of the P.R.C increased the issuing of bonds on the market. Throughout the year, it made 5 issues if state bonds at the SSE, a growth of 150% over the previous year. The overall scale of bonds issued was RMB 96 billion, a growth of 269% over the previous year. Of the total of RMB 96 billion in bonds issued at the Exchange, RMB 95.43 billion were registered at the SSE, accounting for 99.41% of the gross circulation. Throughout the year, the total volume of business of state bonds was RMB 1,972.6 billion, a growth of 17.39% over the previous year. Of the government bonds issued in 2001, there were two innovations; the first was the first issuing of extra-long-term government bonds - 20-year Government Bonds. The second was the adoption of half-yearly payment of interest. These two innovations were both successful and welcomed by the market. Up to the end of 2001, the SSE listed a total of 12 government bonds. Throughout the year, a total of 4 issues of corporate bonds were made, the same as the previous year. The overall scale of bonds issued was RMB 9.05 billion, a growth of 201.67% over the previous year. In 2001, the largest scale bond on the China securities market “01 China Mobile Bond” successfully listed on the SSE and reached a total of RMB 5 billion, showing the lateral and vertical development of the SSE corporate bond market. Throughout the year, the corporate bond market traded volumes of RMB 5.166 billion, a growth of 32.5% over the previous year. Up to the end of 2001, the SSE listed a total of 11 corporate bonds.
Conditions for Listing of Government Bonds Government bonds are exempt from verification and approval for listing on the SSE. Central Government Bond Registration and Clearing CO., Ltd. provides a unified custodian system for the government bond market at the SSE.
Conditions for Listing of Corporate Bonds The approval and public notification of departments authorized by the State Council; The net assets value of incorporated companies must be no less than RMB 30 million and the net assets value of limited liability companies must be no less than RMB 60 million; The accumulated total value of issued bonds must not exceed 40% of the company’s value of net assets; The average distributable profit over the last three years must be sufficient to one year’s interest of the bonds; The direction of fund raising must conform to the Nation’s industrial policy and the approved uses of the issue examination and approval organs; The term of the bonds must be more than 1 year; The interest rate of the bonds must not exceed the interest rate level restrictions of the State Council; The amount of corporate bonds actually issued must not be less than RMB 50 million; The credit rating for the bonds must not be less than A; The bonds must have a bond sponsor whose conditions for sponsorship must conform to the laws, regulations and provisions. For bonds with a credit rating of AAA and the management authority agrees to exempt sponsored bonds; The company apply for the issue of its bonds must still meet the stipulated bond issue conditions at the time of listing; Other conditions recognized by this Exchange.
Conditions for Listing of Convertible Bonds
1. The approval and public notification of the CSRC; 2. The actual circulation of the convertible bonds must be more than RMB 100 million; 3. The term of the convertible bonds must be more than 3 years but no more than 5 years; 4. The interest rate of the convertible bonds must not exceed the interest rate level
restrictions of the State Council; 5. Must conform to national laws, regulations and other conditions prescribed by this
Exchange.
Treasury Bonds Listed in 2001
Bond Way of Issue Issue value
(in 100 mil. RMB)
Value
date
Listing
Date
Maturity Term
(year)
Nominal
rate 96 T-bond(6) Book entry 255.30 19960614 19960712 20060614 10 11.8396 T-bond(8) Book entry 201.10 19961101 19961121 20031101 7 8.5697 T-bond(4) Book entry 130.00 19970905 19970925 20070905 10 9.7899 T-bond(5) Book entry 160.00 19990820 19990906 20070820 8 3.2899 T-bond(8) Book entry 200.00 19990923 19991013 20090923 10 3.3020 T-bond(4) Book entry 140.00 20000523 20000602 20100523 10 2.8720 T-bond(10) Book entry 120.00 20001114 20001127 20071114 7 2.6321 T-bond(3) Book entry 120.00 20010424 20010510 20080424 7 3.27
Debentures in 2001
Debenture Issued value
(in 100 mil.
RMB)
Maturity Open
(RMB)
Close
(RMB)
High
(RMB)
Low
(RMB)
Trading value
(ten thousand
RMB) 99 Baosteel 20.00 20050810 103.00 103.49 110.10 102.60 7878.3301 China Mobile 50.00 20110617 103.00 100.89 104.00 100.00 18819.0197 China Railway ⑸ 16.00 20030610 124.90 136.20 137.00 120.00 104962.5098 Three Gorges⑶ 10.00 20020117 110.36 116.48 116.90 103.98 68915.9598 Three Gorges⑻ 10.00 20070117 107.18 115.66 120.00 100.85 66805.4298 China Railway⑴ 16.00 20031223 115.58 126.11 127.98 113.00 67037.3798 China Railway⑵ 10.00 20041012 99.90 107.95 109.00 98.01 38441.6998 China Railway⑶ 24.00 20091012 99.50 103.89 116.00 97.00 43561.3999 Three Gorges 30.00 20100725 101.40 100.45 103.80 99.10 49723.28
Monthly Trading Value of Treasury Bond Spot in 2001
Month Trading value
（in ten thousand RMB）
Trading volume
（in ten thousand lot）
1 1730516.52 1648.71
2 1936303.18 1759.36
3 3254988.81 2985.93
4 2886992.08 2674.27
5 2517631.05 2424.88
6 3294630.69 3131.43
7 2466247.23 2347.80
8 3976621.43 3783.29
9 4589495.21 4280.68
10 5019380.01 4641.22
11 6912107.12 6533.58
12 5245655.98 5023.49
Funds
Summary 2001 was another year of the continued regulatory development of securities investment funds. The original investment funds were liquidated and six funds were successively listed at the SSE following regulation – Anrui Fund, Purun Fund, Xingye Fund, Kexun Fund, Tongde Fund and Jingye Fund. The newly-established Rongtong Fund Management Co., Ltd. managed the issue of 2 billion Tonggan securities investment fund which also listed in September 2001, bring the number of funds listed at the Shanghai securities market to 23. Apart from Jingye Fund, the above 5 restructured original securities investment funds successfully expand financing in 2001. Later in March 2001, the last two original investment funds Shenyang Jiushen and Shengyang Xingshen merged with Shenzhen’s Fudao Fund. This signaled the end of the year and a half liquidation work of the original investment funds. In 2001, year round turnover of SSE listed funds was RMB 114.83 billion, trading of securities investment funds accounting for RMB 114.63 billion, whereas the original investment funds prior to regulation only realized trading of RMB 230 million. In 2001, the Shanghai Fund Index reached a high of 2,245.44 points and explored a low of 1,515.86 points, finally closing at 1,645.97 points. 2001 could well be called the experimental year of “Open-end Funds”. China’s first open-end securities investment fund, Huaan Innovation, was founded on September 21, 2001. To the end of 2001, three Open-end Funds have appeared - Huaan Innovation, South Wenjian Growth and China AMC Growth. Since the establishment, Open-end Funds have shown better than average performance. Huaan Innovation for example, through its operation from its founding in September 21, 2001 to December 31, the unit net worth of Huaan Innovation Fund grew 1.2%, beating the Shanghai Composite Index by 10.11 percentage points over the same period. In 2001, the CSRC launched a series of regulations to regulate the establishment and operation of fund management limited companies and securities investment funds such as the “Notice regarding the Securities Trading in the Regulation of Securities Investment Fund Operations” and “Notice regarding the Establishment and Review Procedures for Fund Management Companies” etc. It also sought consultative opinions from the public regarding regulations such as “Provisional Regulations (exposure draft) for the Equity Participation and Participation in Establishment of Fund Management Companies by Foreign Organizations”. This is a sign of that the securities investment fund legal system is gradually moving towards healthy development. The Shanghai Fund Index is also known as the “SSE Fund Index”. It has a base index of 1,000 points and its sampling scope is all securities investment funds listed at the SSE. It uses a Passche Index Formula with the total number of fund units issued as its weight number. The Shanghai Fund Index is a fund price index and is not within the scope of any stock price index.
Summary To the end of 2001, Shanghai Stock Exchange had 255 members, including 112 securities company members and 143 non-securities company members. There were 2,728 sales departments under the members with 5,179 trade seats, including 4,909 A Share seats and 270 B Share seats. Among the securities company members, 30 members had registered capital of more than RMB 1 billion, 10 members more than RMB 2 billion and 3 members RMB 3 billion. In order to better implement the functions of unified supervision and strengthen the risk protection of members, under the leadership of the CSRC, Shanghai Stock Exchange to regulate members’ operational behavior on the basis of the “Securities Law of the People’s Republic of China”:
1. Strengthening construction of relevant systems, gradually improving the business rules for member management, seat management and other areas of operation.
2. Great importance is being given to the development of information systems, on the basis of the existing annual report and monthly report analysis system and members’ sales department information systems, the Exchange is currently developing a member integrated management information system to provide strong technical support and safeguards for the supervision of members.
3. Membership management is being carried out strictly and members are urged to fulfill the reporting obligations in time and guarantee the accuracy and integrity of members’ essential information. At the same time, SSE is currently working with the CSRC to implement the separation of credit organizations and securities organizations and the restructuring policies of treasury bond institutions and to carry out the change of membership and membership revocation of members.
4. Daily supervision is being strengthened. On one hand, analysis is being carried out of member’s financial conditions, the principles of “classified supervision” are being implemented. Tracking of the financial status of some relatively poorly-performing members is being continued and supervisory information is transmitted in a timely manner to the CSRC and other members. On the other hand, unscheduled inspections are carried out of the members’ enforcement of Shanghai Stock Exchange operational rules.
While strengthening the supervision of members, SSE has taken providing superior service to its members to new strategic heights. After release of the “Shanghai Stock Exchange Service Outline”, it successively launched member membership service guides, fully designated trading services guide and other service items and is now gradually improving the monitoring mechanisms of its services. Additionally, the SSE also holds trader training courses at various times according to the demands of members.
Geographical Distribution of the SSE’s Members and Their Business Departments
