Shenzhen-Hong Kong stock connect's southbound track needs more appeal

Beijing will need to spice up the appeal of the southbound track of the Shenzhen-Hong Kong through train scheme, given that mainland investors can already trade the city's stocks under the trailblazing market tie-up with Shanghai.

An increased quota and the inclusion of more Hong Kong stocks that can be traded by mainlanders under the scheme top industry expectations of the incentives that may be rolled out to help ensure more balanced trading when the second cross-border share programme starts in the second half of this year.

While fund managers and brokers say many Hong Kong and international investors would be keen to channel money northbound to tap the Shenzhen market's entrepreneurial spirit, the level of interest for trades heading the other way looms as a big question mark over the scheme.

"In some ways the southbound aspect is a repeat of what already has been made available through Shanghai," said Mark Konyn, chief executive of Cathay Conning Asset Management.

"There may be mainland investors who trade exclusively in the Shenzhen stock market. The soon to be launched Hong Kong and Shenzhen stock connect will appeal to these investors."

Joseph Tong Tang, executive director of Sun Hung Kai Financial, said Shenzhen and other parts of Guangdong have many investors who are familiar with Hong Kong companies and they would like to trade their shares via Shenzhen.