BROKERS are predicting the 'hot money' which has swamped China's A-share markets might raise H-share prices in Hong Kong. The Shanghai and Shenzhen A-share markets for domestic investors have surged 47 per cent and 38 per cent respectively since authorities froze trading in Shanghai bond futures on Thursday. Several H shares, which have their A shares traded on the Shanghai Stock Exchange, joined the rally last week. Maanshan Iron and Steel's Hong Kong share price has risen more than 20 per cent over the past two weeks. Its A-share price has jumped 40 per cent in Shanghai over the same period. Judging from the firm's profit prospects and the quality of the group, the current price was not justified, one local analyst said. 'The price surge in Shanghai has a speculative element and has lifted up its H-share price in Hong Kong,' he said. He added the supply of steel exceeded demand in China and the industry was still suffering from the austerity measures launched by the Chinese Government. Research director at Dharmala Securities, Ben Kwong Man-bun, said there was a chance the hot money would affect red chips and H shares. He predicted a large amount of capital would flow into the mainland securities markets for speculative purposes as a result of the ban. 'The hot money is looking for exits to hedge against China's inflation,' Mr Kwong said. He said the Chinese authorities were looking at introducing measures to plug loopholes in the bond futures market. But until the measures were implemented, speculation on the securities markets would continue. 'Since the A-share markets are more liquid than the B shares, the hot money will look for any markets with a quick return,' he said. Individuals' savings in China are estimated to exceed 2,000 billion yuan (HK$1,860 billion) and institutions and enterprises were looking for high-yielding investment tools. Mr Kwong said some investors in China blindly followed market speculation and the lack of proper financial disclosure added to the risk of investing in mainland securities. The China Securities and Regulatory Commission issued an emergency notice last Wednesday ordering the suspension on treasury bond futures trading after finding several cases of rules violations.