More mainlanders are betting on Hong Kong-listed H shares as fears of further market corrections in Shanghai and Shenzhen increase and the nation's professional investors gear up to buy stocks in the city.
Local brokerages say mainlanders now represent 30 per cent of new clients and have become more active in recent days. Christopher Cheung Wah-fung, chairman of the Hong Kong Securities Professionals Association, said this was a sign investors had shifted their focus from the mainland A-share market to H shares which are trading at a discount.
The Shanghai Composite Index has slipped more than 7 per cent in the past two days amid fears of further taxes on equities trading, including a capital gains tax.
Also raising interest in H shares is the expanded qualified domestic institutional investor programme which from yesterday allowed mainland fund management companies and securities firms to trade Hong Kong stocks.
The programme will be expanded in the next two months to include insurers. H shares are mainland companies listed in Hong Kong.
Mainland-backed securities firms including China Merchants Securities (HK) have seen an 80 per cent rise in the number of mainlanders opening new accounts in the first half.
Raymond Lam, a director and deputy general manager of the brokerage, said mainlanders represented 60 per cent of its clients in Hong Kong, double that of last year. These investors represented almost 40 per cent of all transactions, he said.
