Recruiting in China

Shares worth $5.01 trillion changed hands on the Shanghai Stock Exchange in 2009, compared with $4.07 trillion on the Tokyo Stock Exchange

By Zhang Shidong and Shiyin Chen

(Bloomberg) — Shanghai overtook Tokyo as Asia's biggest stock market by trading value last year, as an 80 percent jump in China's benchmark index boosted equities demand.

Shares worth $5.01 trillion changed hands on the Shanghai Stock Exchange in 2009, compared with $4.07 trillion on the Tokyo Stock Exchange, according to data compiled by Bloomberg. The Shanghai and Tokyo exchanges were ranked third and fourth globally, the Nikkei newspaper reported, citing the World Federation of Exchanges. Only the Nasdaq stock market and the New York Stock Exchange had higher trading volumes than Shanghai.

"As an emerging market, China has a very high ratio of stocks changing hands," said Li Jun, a strategist at Central China Securities Holdings Co. in Shanghai. "Increased new share sales are also one reason behind the high turnover. It'll probably take one year or two for China to catch up with the world's biggest."

The Securities Regulatory Commission on Jan. 8 approved short sales, stock index futures and margin trading. Morgan Stanley said the reforms may boost transaction volume by 50 percent, helping to usher China's market into a "new era."

The Shanghai Composite Index rebounded last year from a 65 percent loss in 2008 after the government introduced a 4 trillion-yuan ($585.9 billion) stimulus package, encouraged banks to advance record loans and subsidized individual purchases of cars and home appliances. Japan's Nikkei 225 Stock Average rose 19 percent.

Shanghai has the world's third largest stock market by market capitalization, briefly overtaking Tokyo in July 2009. New York is the biggest by market cap.

Mainland companies raised 207.6 billion yuan from initial public offerings in 2009, double from the previous year, according to Bloomberg data.