New | Shanghai-Hong Kong stock connect disappoints in 2015, regulatory changes needed to ensure their success
Brokers want to see Shenzhen, bond and commodities connect to kick off
The Shanghai and Hong Kong stock connect failed to live up to market expectations, but the appetite of the stock exchange and brokers for more connect schemes in 2016 has not been sated although they are seeking a lineup of regulatory changes to make these cross border schemes a success.
Top of their the wish list is the Hong Kong and Shenzhen stock connect, which initially was expected to be launched by the end of last year but was delayed without a launch date after the summer rout in mainland China’s equity markets.
“Shenzhen has many more small and medium sized A-shares which are favoured by the retail investors. The launch of the Hong Kong and Shenzhen stock connect will definitely help boost market sentiment,” said Christopher Cheung Wah-fung, lawmaker of the financial services sector who is also a stock broker.
He also called for removal of the quota and the restriction that mainlanders need to have at least 500,000 yuan in their securities account before they are qualified to trade the connect scheme.
“These restriction have discouraged investors to trade the connect scheme and that was why cross border trading has low turnover,” he said.
The Shanghai and Hong Kong stock connect completed its first year in 2015 and HK$2.534 trillion worth of shares traded under the scheme. This includes northbound trade with international investors dealing a total of 1.471 trillion yuan (HK$1.756 trillion) worth of Shanghai-listed A-shares in 2015 via Hong Kong brokers, while the southbound trade with mainlanders hit a total of HK$777.73 billion worth of Hong Kong stocks.