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Brokerages bullish on proposed market link-up


01-07-2015 17:24 BJT

With Chinese Premier Li Keqiang announcing that a Shenzhen-Hong Kong stock trading link-up should come next, what impact will this have on overall cross-border trading, with the Shanghai-Hong Kong Stock Connect Scheme now in place?

Here at First Shanghai Financial Holding, business has been brisk since the trading link-up between Hong Kong and Shanghai got going since November. For over six weeks now, Shanghai-listed trades made through this brokerage have accounted for up to 30 percent of this brokerage’s daily volumes, says Director Eliot Li, of first Shanghai Financial Holdings.

That’s why he has little doubt - plans for a similar link-up between the Hong Kong and Shenzhen stock exchanges – are only likely going to improve investor sentiment further.

The big question is which bourse will benefit more – Shenzhen or Hong Kong? Some analysts say with the way the Shanghai-Hong Kong Stock Connect scheme’s panned out, it is likely Mainland-listed shares in Shenzhen will turn out the bigger winners in the proposed link-up. Either way, Hong Kong benefits, say analysts, as the total volume of transactions will significantly pick up.

Investor sentiment has so far been upbeat. Shanghai stocks now hover at more than five year highs since the scheme’s launch.

Hong Kong’s total volumes have since ballooned by a third more. And while the Hang Seng Index hadn’t picked up as much, positive sentiment on the Mainland has helped keep Chinese listed shares in Hong Kong from dipping any further, says Kenny Tang of AMTD Financial Planning.

Reason why brokers now expect the Shenzhen-Hong Kong link-up to go online earlier – by the middle of this year.



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