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10-06-2020, 05:44 PM
(This post was last modified: 10-06-2020, 07:05 PM by specuvestor.)
They have the same economic benefits but different classes so that fungibility cannot be a loophole for currency control. From a sovereign perspective they have a "hidden option" to marginalise offshore holders like marginalising onshore and offshore debt during GFC, though it is not written anywhere as well. It's a ringfencing function.
Older folks will also remember Singapore has a similar system of eg DBS (Local) and DBS (Foreign) as well and the prices differ even on the same exchange. You can see this difference for some of the H-shares and A-shares of the same company. But when they converge, as some has been hoping for past 10 years, it will be a windfall just as Singapore (Local) and (Foreign) convergence was. But it may not be a viable strategy to wait maybe another decade.
You can also structure it like what Thailand did with NVDR, after abolishing the foreign board which was interestingly convertible with local board if it hasn't hit the regulatory limit, as they know foreigners are not really that keen on voting rights in emerging Thailand as long as they have the same economic benefits.
This is part of the Structure that we need to understand and analyse
Older folks will also remember Singapore has a similar system of eg DBS (Local) and DBS (Foreign) as well and the prices differ even on the same exchange. You can see this difference for some of the H-shares and A-shares of the same company. But when they converge, as some has been hoping for past 10 years, it will be a windfall just as Singapore (Local) and (Foreign) convergence was. But it may not be a viable strategy to wait maybe another decade.
You can also structure it like what Thailand did with NVDR, after abolishing the foreign board which was interestingly convertible with local board if it hasn't hit the regulatory limit, as they know foreigners are not really that keen on voting rights in emerging Thailand as long as they have the same economic benefits.
This is part of the Structure that we need to understand and analyse
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Think Asset-Business-Structure (ABS)
Think Asset-Business-Structure (ABS)