Shanghai investors cool on Hong Kong stocks
Cross-border trading scheme draws minimal interest on the mainland due to high entry barrier for participants and market loopholes
Despite the hype over the so-called through train scheme, fewer than 1 per cent of the retail brokerage clients in Shanghai have registered to set up H-share accounts to trade directly in Hong Kong equities, industry sources told the South China Morning Post.
The high barrier of entry to the new scheme and the existing loopholes that already allow mainlanders to dabble in Hong Kong stocks are seen as the main spoilers.
The securities regulators in Hong Kong and Shanghai said yesterday that the through train, which allows Hong Kong and mainland investors to conduct cross-border trades, would start on Monday, ending a month-long guessing game on the launch date of the programme.
Under the new scheme, mainland investors can buy up to 10.5 billion yuan (HK$13.2 billion) a day of Hong Kong stocks, with a maximum of 250 billion yuan in total.
"Only a handful of our clients have opened H-share accounts so far," said West China Securities analyst Wei Wei. "Indeed, the number of investors who are really interested is minimal."
According to two other brokerage sources, fewer than 1 per cent of their clients have either opened an H-share account or indicated doing so at some point in the future.
Individual investors will not be qualified to buy Hong Kong shares unless they have a capital base of at least 500,000 yuan. Those with that kind of money, said brokers, were already in the market.