Shanghai will auction now-defunct paper stocks of listed companies worth a total value of more than 2 million yuan (US$240,964) through Shanghai New Century Auction Co Ltd on Saturday.

The auction will include paper stocks in the first eight companies listed on the Shanghai Stock Exchange in the early 1990s, including Yanzhong Industrial Co Ltd, which has been now renamed as Founder Technology Group Corp, Feilo Acoustics Co Ltd and Shanghai Yuyuan Tourist Mart Co Ltd.

The paper stocks were tangible certificates representing investors' interest in companies when China started on a trial basis in the 1980s to convert state-owned enterprises into shareholding firms.

But the paper stocks have been phased out as a result of the introduction of the paperless electronic trading on China's stock market in 1994.

The value of paper stocks have soared recently among collectors for the rarity and the potential for further rising valuation.

For instance, the price of a paper stock that was worth only a few thousand yuan in 1998 has already been boosted to more than 100,000 yuan now.

The 31 paper stocks in Yanzhong Industrial have the highest floor price of 1.2 million yuan at Saturday's auction.

The 31 paper stocks are still valid now as the owner has not converted them into the paper-less electronic shares in China Securities Depository and Clearing Corp, said the auction house.

(eastday.com April 14, 2004)