The Shanghai Stock Exchange (SSE), based in China’s financial hub of Shanghai, is one of the largest and most influential stock exchanges in the world. As the primary dexchange in mainland China, the SSE plays a crucial role in facilitating the country’s economic development and connects both domestic and international investors to China’s dynamic economy.
Daily Movers – Shanghai Stock Exchange
Founded in the early 1990s as China’s markets began to open, the SSE provides a well-regulated platform for trading a diverse range of securities, including stocks, bonds, and derivatives. In this article, we will explore the history, structure, key divisions, and global impact of the Shanghai Stock Exchange.
Top Chinese Listed Companies
The Shanghai Stock Exchange is home to a diverse range of companies, with over 1,644 listed firms in mid 2024. This number can change from time to time, as new firms IPO, and others may delist.
Whilst there are many companies listed, certain stocks get more attention than others. We have highlighted some of the top Chinese listed stocks below, but there are many more besides. Depending on your investing or trading goals, there will be certain sectors or trends that might appeal to you more than others.
| Company | Market Cap (As of November, 2024) |
|---|---|
| 600519 Kweichow Moutai Co Ltd | $2.35 Trillion |
| 601398 Industrial And Commercial Bank Of China Ltd | $1.47 Trillion |
| 601288 Agricultural Bank of China Ltd | $1.01 Trillion |
| 601857 PetroChina Co Ltd | $929.22 Billion |
| 600036 China Merchants Bank Co Ltd | $981.27 Billion |
| 601628 China Life Insurance Co Ltd | $844.27 Billion |
| 601988 Bank Of China Ltd | $899.16 Billion |
| 601318 Ping An Insurance (Group) Co. of China Ltd | $916.21 Billion |
| 600900 China Yangtze Power Co Ltd | $503.33 Billion |
| 601088 China Shenhua Energy Co Ltd | $530.71 Billion |
Daily Movers – Indices
The Shanghai Stock Exchange – an Introduction
The Shanghai Stock Exchange (SSE) was officially established in 1990 as part of China’s economic reforms under the “open door” policy initiated in the late 1970s. While formal trading of stocks was a new concept in China, the SSE built on Shanghai’s history as a financial center dating back to the 19th century. The exchange was created to support China’s rapid industrialization and provide a platform for state-owned enterprises (SOEs) to raise capital.
| Aspect | Detail |
|---|---|
| Foundation Year | 1990 |
| Market Capitalisation | Over $7.3 trillion USD (as of 2023) |
| Major Markets | Main Board, STAR Market, Bond Market |
| Notable Milestones | Introduction of the SSE Composite Index (1991), Launch of STAR Market (2019) |
Initially, the SSE had a limited selection of listed companies, with a strong focus on SOEs. Over the years, it has evolved to include a more diverse array of companies, including private enterprises and high-growth tech firms, particularly after the launch of the STAR Market in 2019. Today, the SSE is one of the most liquid exchanges globally and a major driver of China’s economy.
1991: Launch of the SSE Composite Index, the main benchmark index tracking all stocks on the SSE.
2003: Introduction of the Qualified Foreign Institutional Investor (QFII) program, allowing limited foreign investment in SSE-listed A-shares.
2014: Launch of the Shanghai-Hong Kong Stock Connect program, enabling cross-border trading with the Hong Kong Stock Exchange.
2019: Launch of the STAR Market (Science and Technology Innovation Board), China’s answer to NASDAQ, focused on high-tech and innovative companies.
Structure of The Shanghai Stock Exchange
The SSE operates across three primary segments, each designed to meet the needs of different types of companies and investors. This structure supports the trading of a wide range of securities, from large-cap state-owned enterprises to emerging tech companies.
The Main Board is the primary segment of the SSE, consisting of large, well-established companies, most of which are state-owned enterprises (SOEs) and major corporations. These companies are often leaders in their respective industries, covering sectors like finance, energy, industrials, and telecommunications.
Launched in 2019, the STAR Market is often referred to as China’s equivalent of NASDAQ. It was created to support high-tech and innovative companies, including those in emerging fields like biotechnology, artificial intelligence, new energy, and semiconductor manufacturing. The STAR Market has less stringent listing requirements than the Main Board, making it easier for younger, high-growth companies to go public.
The Bond Market on the SSE includes both government and corporate bonds, providing a platform for fixed-income securities that offer more stability compared to equities. The SSE bond market includes government bonds, enterprise bonds, and corporate bonds, with both domestic and international participants. With China’s increased issuance of green bonds and sustainability-linked bonds, the SSE bond market has also become a hub for ESG-conscious investments.
Major Industries
China’s financial services sector dominates the SSE, with large banks like ICBC, Bank of China, and Agricultural Bank of China listed on the Main Board. These banks play a critical role in China’s economy by supporting domestic growth, infrastructure projects, and trade.
The energy sector is another major component of the SSE, with giants like Sinopec and PetroChina playing leading roles in the global oil and gas industry. China’s focus on achieving energy independence and sustainability has also led to increased investment in clean energy and green initiatives within the sector.
The technology sector has seen rapid growth on the SSE, especially on the STAR Market. With China’s strategic focus on achieving technological self-reliance, companies in semiconductors, AI, and biotechnology are receiving strong backing from both investors and government policies.
Consumer goods reflects China’s growing middle class and their increasing demand for high-quality products and services.
Innovations
The Shanghai-Hong Kong Stock Connect program, launched in 2014, allows international investors to buy A-shares listed on the SSE through the Hong Kong Stock Exchange. This program has significantly increased foreign participation in China’s stock market, providing overseas investors with easier access to Chinese assets and enhancing liquidity.
The Shenzhen-Hong Kong Stock Connect program, launched in 2016, extended this access to the Shenzhen Stock Exchange, giving investors broader exposure to Chinese equities.
The STAR Market’s creation was a major step for the SSE in attracting high-growth technology companies and supporting China’s goal of technological innovation. With the STAR Market, the SSE provides a unique platform for high-tech companies to raise capital, fostering innovation in sectors critical to China’s economic future.
As environmental concerns grow, the SSE has positioned itself as a leader in green finance. The exchange has introduced various green bonds, sustainability-linked bonds, and ESG-focused products. The SSE is also a key player in the Green Bond Principles, aligning itself with global best practices to support sustainable projects and attract ESG-conscious investors.
