Research On The Price Difference Between A-share And H-share

Dual listing means one company’s stock appears on different exchange markets. For the sake of assimilating foreign asset or enhancing their reputation abroad, many enterprises tend to utilize this method to issue shares. While under the situation of market separation, there will be a tremendous distinct from price to price even though they are both belong to the same company, which is considered as one of the most primary question in the modern international finance and Asset Pricing Theory, exists in many country’s Securities markets and was extensively focused by various governments, enterprises, investors as well as academic scholars.This phenomenon also appears in Chinese stock market. Some stocks which are both listed in mainland and Hongkong have a huge different behavior. Therefore, to concentration on the price gap of the dual-listed company, to explore the utmpst factors affecting the unsynchronized price, to reveal its intrinsic discipline has a significant impact on commanding the performance of the separated-market stocks’ price and preventing the risk of arbitrage in domestic exchange markets.Owing to the basic background of China’s stock market, firstly this thesis shows a detailed retrospect upon the problem aroused by beginning, course, merit and so on. After that, it gives a thorough analysis on the factors of dual-listed company’s price discrepancy including quoting relevant articles. Then, referring to the contribution of the internal and foreign scholars, I combined the theory with the practical circumstance, selected25corporation as my investigative specimens range from2009.12to2012.12to make a related empirical analysis by means of establishing econometric model. Finally, according to the generated result, I raised a series of suggestion to decrease the discrepancy of stock price in A/H market for the robust growth of our stock market.Comparing with previous associated articles, the innovation of my dissertation lies on the below3points:(1)Not only measuring the difference from the market performance but also from the elaborating fundamental aspect of the company which can give a comprehensive impression to the spectator.(2)Adopting the latest transaction data up till2012.12, compliance with the contemporary economic environment.(3) Based on the model resulted from the empirical analysis, I offered some proposition to the government to optimize our domestic stock market environment.