But B shares were very popular with Chinese investors. The local demand for cheaper B shares has seen them more than double in 2001, compared with a 1 percent drop in MSCI's emerging-markets index in 2001. Shanghai stocks, traded in U.S. dollars, have risen almost 150 percent through Wednesday. Shenzhen's B shares, traded in Hong Kong dollars, were up 178 percent. On June 1, Chinese investors who had opened foreign-currency accounts since February, presumably to get into B shares, could start playing the stocks.
Most strategists expect that to bring a bull run over the next few months.
But China's B share markets have dropped since then. Ho believes the big investors who got in first have been selling B shares to the man on the street. Though it's illegal, rich mainland investors often take stock-buying vacations to open brokerage accounts in Hong Kong. The Guangzhou Daily reports that over a holiday weekend at the start of May, more than 40 such tours brought more than 800 investors from the mainland. H shares and red chips benefit They can then invest the money back in Hong Kong's Chinese stocks.