Shanghai Stock Exchange

The Shanghai Stock Exchange is one of the world’s largest stock exchanges, with a market capitalisation of £5.8+ trillion. Shanghai Stock Exchange brokers provide an opportunity for UK investors to trade and diversify on some of the world’s biggest companies. This guide will cover what the Shanghai Stock Exchange is, its history, key stocks, listing requirements and how to start investing. Our table also ranks the best brokers with access to the Shanghai Stock Exchange:

Choosing Shanghai Stock Exchange Brokers

Online Shanghai Stock Exchanges brokers allow you to trade listed securities, despite the SSE being fairly closed off to foreign investors. These firms offer CFDs and other derivatives on index products and stocks. Compare brokers in the following categories:

Trading Platform

The primary way you will interact with the Chinese stock markets is through a trading platform. There are a variety of platforms out there, with some designed to be intuitive and easy to use, while others provide complicated price charts and trading volume technical analysis tools for complex strategy implementation. The best Shanghai Stock Exchange brokers will offer top platforms like MetaTrader 4, MetaTrader 5 or TradingView. Others will build and provide their own, bespoke trading platforms.

While using Shanghai Stock Exchange brokers, our experts found it best to use a platform that provides all the features necessary to implement your trading strategy whilst also maintaining a good level of useability.

Lots of firms offer free demo accounts that allow you to try using their platform before investing real money. This is a great way to find a platform that suits you.

Assets

If you are looking to trade on the Shanghai Stock Exchange, you are probably looking to invest in certain Chinese assets. This could be Chinese companies or an SSE index. You should make sure that any SEE brokers you consider offer the assets you want to trade. Some may only offer certain types of vehicles, such as CFDs, with no access to direct share dealing.

Base Currency

UK brokers will benefit from Shanghai Stock Exchange brokers that offer GBP as a base currency. With these firms,  no capital is lost in foreign exchange fees when depositing into your account.

SSE stocks available to foreign investors are typically tradable in USD, so finding a broker with a cheap foreign exchange rate between GBP and USD can help minimise costs.

Fees

Fees can quickly eat away at your capital and profits. There are several different types of fees that SSE brokers charge, such as deposit and withdrawal fees, foreign exchange fees, order commissions, spreads, swap fees, margin rates and software subscriptions. Evaluating the fee structure of a broker in reference to the features on offer and your strategy will help maximise profit potential.

Regulation

Invest with brokers regulated by reputable financial agencies like the Financial Conduct Authority (FCA). This ensures that the broker follows strict client protection protocols, stopping investors from falling victim to financial fair play violations.

Shanghai Stock Exchange brokers like Admiral Markets and Pepperstone are regulated by the FCA.

What Is The Shanghai Stock Exchange?

The Shanghai Stock Exchange (SSE) is one of the three exchanges operating in mainland China, along with the Beijing Stock Exchange and the Shenzhen Stock Exchange.

The SSE is the third largest stock market in the world in terms of market capitalisation (behind the NYSE and NASDAQ) and is Asia’s biggest.

The Shanghai Stock Exchange is a non-profit organisation that is administered by the China Securities Regulatory Commission (CSRC). As such, it is affected by the decisions of the Chinese central government, with capital account controls being exercised, and is thus not entirely open to foreign traders.

History

The exchange started as the International Settlement in Shanghai, a foreign concession area formed as a result of the Treaty of Nanking of 1842. The securities market started trading in the late 1860s, with the first share list appearing in June 1866.

In 1891, the Shanghai Sharebrokers Association was founded by foreign businessmen as China’s first stock exchange, which was renamed the Shanghai Stock Exchange in 1904. The Shanghai Securities & Commodities Exchange and Shanghai Chinese Merchant Exchange merged into and joined the Shanghai Stock Exchange in 1929.

By the 1930s, the Shanghai Stock Exchange had become the financial centre of the far east, allowing for the trading of many different instrument types, such as stocks, bonds and futures.

However, in 1941, the exchange was halted due to Japanese occupation. The Shanghai Stock Exchange briefly resumed operation between 1946 and 1949 before closing because of the Communist revolution taking place in China.

Eventually, China opened itself back up to the outside world in 1978, with the Shanghai Stock Exchange re-establishing in late 1990. In 2019, the Shanghai Stock Exchange launched a technology firm market called the STAR Market, designed to rival the NASDAQ.

Markets

The Shanghai Stock Exchange lists three main categories of financial markets: stocks, bonds and funds. Companies listed on the exchange range from banks and insurance companies to medical companies and research firms.

Shares on the Shanghai Stock Exchange are broken down into A-Shares and B-Shares.

A-shares are known as domestic shares. These are stock shares of mainland-China companies valued in Chinese Renminbi (RMB). A-shares were historically only available to Chinese citizens. However, since 2003, the Qualified Foreign Institutional Investor (QFII) system has allowed certain foreign institutions to trade A-shares.

B-shares are known as domestically listed foreign investment shares. These are stock shares of mainland-China companies valued in the Renminbi (RMB) but settled in USD. These were initially only offered to foreign investors but were opened to domestic citizens in 2001.

B-shares differ from A-shares in that they are generally more open to foreign investment. There are also far fewer companies that list B-shares, only 44 equities currently do so. These companies represent many sectors and industries, including electronics, real estate, retail and tourism.

Largest Stocks

The 10 largest Shanghai Stock Exchange companies and their valuations:

• Kweichow Moutai – Approx. £309.720 billion
• Industrial and Commercial Bank of China (ICBC) – Approx. £204.580 billion
• China Merchants Bank – Approx. £161.900 billion
• Agricultural Bank of China – Approx. £130.220 billion
• Ping An Insurance (Group) Company of China – Approx. £121.600 billion
• PetroChina Company – Approx. £116.403 billion
• Bank of China – Approx. £109.870 billion
• China Life Insurance Company – Approx. £88.920 billion
• China Yangtze Power – Approx. £63.970 billion
• Foshan Haitian Flavouring and Food Company – Approx. £58.440 billion

Indices

The Shanghai Stock Exchange has several indices tracking the performance of stocks on the exchange.

• SSE Index – The primary index is the SSE Composite Index (or SSE Index). This tracks the performance of all shares traded on the SSE, including both A-shares and B-shares.
• SSE 180 – This is a stock index representing the top 180 companies on the exchange according to float-adjusted capitalisation.
• SSE 50 – This is a subindex of the SSE 180, representing the top 50 companies by float-adjusted capitalisation. It is regarded as a blue-chip index of the exchange.
• SSE Mega-Cap – This is an index of the 20 largest and most liquid stocks on the SSE, aiming to reflect the overall performance of the mega-cap firms.

There is also the CSI 300 Index, which includes shares from the Shanghai and Shenzhen Stock Exchanges together.

Price Chart

Shanghai Stock Exchange Trading Rules & Requirements

Several conditions must be fulfilled for companies to be listed on the Shanghai Stock Exchange::

• The China Securities Regulatory Commission (CSRC) must approve the company
• The total market cap of the company must exceed 30 million RMB (roughly £3.5 million)
• For companies with over 400 million RMB market cap, 15% of total shares must be publicly offered
• For companies with under 400 million RMB market cap, 25% of total shares must be publicly offered
• The company must have been in operation for over three years and must have made profits for three consecutive years
• The company must have a clean record. This means they cannot have any criminal activity on record for the past three years

Reports must also be published frequently, including annual and interim reports.

Trading Hours

The SSE is open for a total of four hours each day, Monday through Friday. This is between 01:30 and 07:00 GMT, with a break between 03:30 and 05:00 GMT.

Extended hours trading can also be done with some Shanghai Stock Exchange brokers. Pre-market (opening session) hours are from 01:15 to 01:25 GMT and post-market (extended hours) are from 07:00 to 07:30 GMT.

Should You Invest In The Shanghai Stock Exchange?

Being one of the largest exchanges in the world and representing top companies from one of the fastest-growing economies in the past century, Shanghai Stock Exchange brokers provide an exciting opportunity for investors.

However, the index assets and funds available for foreign investors like UK traders are limited due to the closed nature of the exchange. Fortunately, UK investors can make use of ETFs and CFD products to speculate on the exchange’s constituents without directly investing.

How To Trade On The Shanghai Stock Exchange

UK investors can access this market using Shanghai Stock Exchange brokers. These firms may offer CFDs, options and spread betting on SSE stocks and indices, providing derivative and margin speculation opportunities. Alternatively, investing in ETFs can grant exposure to the SSE if these funds are listed somewhere accessible to UK investors.

To get started with Shanghai Stock Exchange brokers you will need to:

1. Find A Broker – You will need to compare and choose a broker that offers the features you require while giving access to SSE stocks.
2. Open An Account – You will now need to set up and open an account. This will usually involve providing personal details and proof of identification.
3. Deposit – Once you have set up your account, you will need to deposit funds into the account via your preferred deposit method. Remember that firms will charge different fees, including foreign exchange fees and possibly deposit rates.
4. Invest – With funds in your account, it is time to start investing. Choose the asset you would like to speculate upon and implement your strategy.

Bottom Line On The Shanghai Stock Exchange

Despite the limited access foreign investors have to the market, Shanghai Stock Exchange brokers offer UK investors the ability to speculate and delve into trading on one of the world’s largest and most important exchanges. CFDs, options, futures and spread betting products can be used to speculate on the performance of the Chinese financial economy without physically purchasing equities, bypassing the restrictions imposed by the Chinese government.

Check out our guide for the key considerations when choosing between Shanghai Stock Exchange brokers or pick from our recommended SSE brokers.

FAQ

Article Sources

Shanghai Stock Exchange English Website

Shanghai Stock Exchange Composite Index