White Collar | Delay in HK-Shanghai stock through train just a hiccup, plan going ahead

It is official - October is history and we have no stock through train yet. The delay of the plan to allow investors to conduct cross-border trading between the Hong Kong and Shanghai stock markets has led some to worry that the much-awaited scheme is going to repeat the last ill-fated through train plan in 2007.

But do not worry. A lot of evidence shows it is unlikely to repeat the events of that year. The through train should still be leaving the station eventually.

Beijing dropped the plan in 2007 just a few months after its announcement in August that year because the scheme did not control or cap the amount mainlanders could use to directly trade Hong Kong stocks.

This time, Beijing has learned its lesson, so when it announced the plan in April, it imposed a quota of 550 billion yuan (HK$694.2 billion).

The scheme will allow Hong Kong and international investors to trade up to 13 billion yuan a day, or 300 billion yuan in total, in Shanghai stocks, while mainland investors can trade up to 10.5 billion yuan a day, or 250 billion yuan in total, of Hong Kong shares.

With the quota in place, what worried Beijing in 2007 no longer existed.