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Shanghai Bourse Is Back, but Can It Make Money?

BEIJING (TheStreet) --The Shanghai Stock Exchange roared back to life in 2013 after a long hiatus as total and daily yuan transactions rose 28% and 41%, respectively, over the previous year's levels, according to the latest data from China's central bank.

The SSE's average daily value of stock and bond transactions topped 96 billion yuan, compared to 67 billion yuan in 2012, despite last year's government freeze on initial public offerings and weak equities that led to a composite index slump.

The data released Tuesday by the People's Bank of China underscored a recovery for trading activity to near-2011 levels. But SSE transactions still fell far short of 2010 volumes.

How the SSE performs in 2014 could depend on how investors react to the unfreezing of initial public offerings, which restarted two weeks ago. The China Securities and Exchange Commission, in a bid to rein in speculators and tighten controls, halted all IPOs on SSE and the Shenzhen Stock Exchange in October 2012. Since the CSRC allowed the first new listing Jan. 17, some three dozen companies have launched IPOs on the exchanges.

The central bank offered no reason for last year's jump in transactions, but funds and securities firms were busier than ever in 2013 trading equities with money raised from booming wealth management products sold to retail investors. Bond trades, which SSE says comprise about 9% of all transactions by monetary value, also picked up steam.

Last year's total SSE turnover was 22.9 trillion yuan, compared to 16.4 trillion yuan in 2012 and 23.9 trillion yuan in 2011, the bank said. Some 30 trillion yuan in trades were recorded during the sterling year of 2010.

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