Shanghai-Hong
Kong stock connect sees record turnover
Send a link to a friend
[April 08, 2015]
SHANGHAI/HONG KONG (Reuters) -
Chinese investors, for the first time, used the entire 10.5 billion yuan
($1.7 billion) daily quota in a cross-border program buying Hong Kong
stocks, boosting turnover under the Shanghai-Hong Kong Stock Connect to
a record.
|
The buying boosted the Hang Seng Index 3.8 percent to its highest
level in nearly seven years. The Hang Seng China Enterprises Index
of Hong Kong-listed mainland companies was up 5.8 percent for the
day, hitting a four-year high.
Hong Kong stock exchange Chairman Chow Chung Kong told a news
conference that total turnover under the stock connect scheme
reached a record high of 29.9 billion yuan on Wednesday. Total
market turnover in Hong Kong also hit a record high of HK$252.4
billion, surpassing the 2007 level.
"Market capitalization in total for all the listed companies in Hong
Kong today reached HK$28.6 trillion...making us the highest market
capitalization exchange in the world."
The milestones follow signs of rapidly rising interest in Hong Kong
stocks from mainland investors, after months of tepid interest that
caused the southbound leg of the stock connector to go largely
unused.
![](http://archives.lincolndailynews.com/2015/Apr/08/images/ads/current/remington_daily_sda_022614.png)
"We are in the midst of a profound structural change: the gradual
but accelerating opening of mainland China's financial markets,"
said HKEX chief executive Charles Li, who was quoted in a press
release commenting on the day's performance.
"Our securities market provides a good investment outlet for
mainland funds and is an excellent way for mainland investors to
diversify their portfolios."
Chinese fund managers, however, said they are moving money more to
seek arbitrage profits from the massive valuation gap between Hong
Kong and Shanghai shares in the same companies, with Hong Kong
shares trading at discounts between 30 to 90 percent to their
mainland peers.
Chen Zhizhong, a Shenzhen-based analyst at China Merchant
Securities, said that the recent three-day weekend was full of
discussion in the analyst community about whether the time was right
to move into Hong Kong.
The consensus answer, apparently, was yes.
[to top of second column] |
![](../images/ads/current/demay_inv-lda081412.png)
"The party has begun, and you can feel the excitement today," Chen
said. "It's hard to say when the music will stop."
Over the past year, China's CSI300 index <.CSI300> has soared more
than 90 percent, while the Hong Kong China Enterprises Index <.HSCE>
rose just 29.8 percent.
The premium China shares have over their Hong Kong-listed peers has
fallen sharply over the past week on signs of increasing demand for
Hong Kong shares.
Analysts say part of the reason for the increased southbound flows
is that Chinese regulators last week allowed mutual funds to buy
Hong Kong shares under the connect program, seen as making it easier
to get around previous barriers to southbound flows, including high
capital thresholds and lengthy application requirements.
($1 = 6.2059 Chinese yuan)
(Reporting by Samuel Shen and Pete Sweeney in SHANGHAI and Michelle
Price and Deena Yow in HONG KONG; Editing by Kim Coghill, Richard
Borsuk and Jacqueline Wong)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
![](http://archives.lincolndailynews.com/2015/Apr/08/images/ads/current/ccaonline_lda050208.png) |