What Is a Cross Holding?

The main feature of cross-shareholding is that A holds the equity of B; B holds the equity of C; C holds the equity of A ... In the bull market, the assets of A, B, and C companies have realized appreciation, which means that they have The shareholdings of other companies are also rising, which in turn stimulates their own stock prices to rise, thereby forming an interactive rising relationship and forming a bubble bull market mechanism.

Cross-shareholding

The main feature of cross-shareholding is that A holds equity of B; B holds equity of C; C holds equity of A ...

Impact of Chinese accounting standards on cross-shareholdings

Current status of cross-shareholdings in Shanghai and Shenzhen listed companies

1. Cross-shareholding is very common, especially in equity participation

How to choose a cross-shareholding company

For the selection of cross-shareholding companies, four types of investment targets are optimistic:

The first category: focus on holding equity in financial companies in the context of local currency appreciation, such as listed companies that hold equity in savings finance, securities firms, and insurance.

The second category: Listed companies that hold equity in companies with opportunities to revalue resources, such as rare metals, petroleum, coal, etc. These companies have strong bargaining power, so their equity may have a greater appreciation in the asset market space.

The third category: listed companies holding equity in high-quality companies.

The fourth category: listed companies that hold equity in upcoming companies.

When choosing these companies, the most important thing is to see how the accounting subjects are handled in the accounting policies of listed companies. The general principle can be summarized in one sentence, that is, "the measurement of the cost of controlling equity and the measurement of the fair value of equity participation." The double benefit of rising prices.

Of course, it is not possible to look at equity investment separately from the fundamentals of the enterprise. When choosing an investment target, it is still necessary to screen companies with better fundamentals against this theme.