The local bourse has asked brokerages to conduct research on a list of topics, the first of which is how to deal with the disparity between A shares and H shares, according to people familiar with the matter.

Brokers have to submit an analysis and proposals by March 12 while the exchange will decide on the most suitable proposal for each topic late this month, the sources said. The research will start in the second quarter, they noted.

The A shares are denominated in yuan and open to Chinese mainland investors as well as select overseas institutions. The H shares are issued by mainland-incorporated firms in Hong Kong and accessible to global investors.

As capital is not allowed to flow freely into and out of the mainland, the A shares and H shares, although each unit represents the same voting right at a listed firm, are not convertible.

The A shares lagged the performance of the H chips in early 2000s as the mainland market was plagued by corporate scandals and insider trading problems.

But as yuan equities started to soar last year, their valuations are now higher than their Hong Kong counterparts.

"I believe valuations on the mainland and Hong Kong markets will tend to get closer as mainland bourses become mature," said Wu Zhiguo, a Guohai Securities Co analyst. "But as long as capital flow is not free, price differences will still exist."

Industry giants such as China Life Insurance Co and Industrial & Commercial Bank of China have shares traded in Shanghai and Hong Kong now.

Stock regulators have said they would encourage cooperation between the mainland bourses and the Hong Kong exchange to improve information disclosures to create a level playing field.

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