P chip

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The term P chip (Chinese: P股) refers to Chinese companies listed on the Hong Kong Stock Exchange which are incorporated in the Cayman Islands, Bermuda and the British Virgin Islands with operations in mainland China, and are run by private sector Chinese businessmen. During the financial crisis of 2007–2010, P chips showed a dramatic increase in the rate of bankruptcy failures as compared to H shares or red chips.

Since the main difference among private sector Chinese companies incorporated abroad is the exchange in which they are listed, the following terms are used to differentiate them:

• P chip if traded in Hong Kong (P stands for "private").
• S chip if traded in Singapore.
• N share if traded in the NYSE, NASDAQ, or the AMEX.
• L share if traded in London.

Therefore, the main difference between P chips and S chips is the exchange on which they are traded.

However, a few market participants may use the term "P chips" to refer to the entire universe of private sector Chinese companies incorporated abroad, regardless of the exchange in which they are traded. Therefore, these market participants may refer to S chips or N shares as P chips.

An index that covers prices of P chips is the MSCI P Chip Index.^[1]