Shenzhen Stock Exchange And Hong Kong Stock Exchange Are Studying The Shenzhen Hong Kong Stock Connect Scheme

Different from many people's expectation that once the Shanghai Hong Kong Stock Connect is opened, a large amount of funds will pour in and the trading quota will be "killed by the second" every day. At the beginning of the opening of the Shanghai Hong Kong Stock Connect, it is difficult to say that the trading is active. Except that the quota for buying Shanghai Stock Exchange shares through the Hong Kong Stock Exchange on the first day is used up, the quota on other trading days is not tight, In particular, the funds to purchase the shares of Hong Kong Stock Exchange through the Shanghai Stock Exchange are quite limited, and more than 80% of the quota is idle most of the time. In this regard, some people explained that the Shanghai Hong Kong Stock Connect, as a trading institutional arrangement, has gradually reflected its influence and is characterized by "slow heat".

In addition, mainland investors are not very familiar with the Hong Kong stock market, especially the T+0 turnaround transaction, the absence of price limit restrictions and other trading methods are not used to, in turn, overseas funds have a greater demand for blue chip stocks in the Shanghai stock market with lower valuations. Some market analysts believe that investors, especially institutional investors, will take a more cautious attitude when investing in the new market, and may need due diligence and risk assessment before considering participating in the new market, as well as time to understand the other side's market and relevant stocks. Some institutional investors may also need to change their portfolio allocation to invest in new markets.

Although these judgments are all reasonable, they do not seem to come to the point. One month after the opening of the Shanghai Hong Kong Stock Connect, the scale of funds to the north has gradually increased, but the imbalance of "hot in the north and cold in the south" has become more serious. There is a tendency of one-way flow of funds. The bigger problem is that many industry researchers believe that with the interconnection of the two markets, the valuation level of Shanghai and Hong Kong stocks will tend to be the same, and the price difference will be erased. But the reality is just the opposite, and the price difference has been widened.

It should be noted that the widening of the price difference here is reverse compared with the original situation. Before the opening of the Shanghai Hong Kong Stock Connect, many large cap blue chip companies listed on the Shanghai Stock Exchange had lower prices of A-shares than H-shares listed on the Hong Kong Stock Exchange. So I heard that the Shanghai Hong Kong Stock Connect would be opened, and all parties in the market believed that A-shares would rise, thus narrowing the distance from H-shares. In fact, A shares did rise during that period, which not only smoothed out the price difference with H shares, but also formed a surplus A-share The price of H shares is generally much higher than that of H shares.

However, Hong Kong Exchanges and Gambling Lottery, the subject of the scarcity of Hong Kong stocks previously favored by institutions, almost never appeared in the list of active stocks. That is to say, in this market situation, there is no large amount of domestic funds going south to buy cheaper H shares, but foreign funds competing north to buy relatively expensive A shares. If it can be explained from the perspective of value investment at the beginning of the opening of the Shanghai Hong Kong Stock Connect, it is obviously unconvincing to say so again.

In fact, the fundamental reason for this situation is that the pattern of the Shanghai and Hong Kong markets has changed greatly in the past two months. At first, it should be said that the trend of the two markets is relatively balanced, but since late November, the Shanghai market has been significantly stronger than the Hong Kong market, and most of the stocks that have gone well are big blue chips, so the wealth effect formed, This will particularly attract overseas funds, including those entering through the Shanghai Hong Kong Stock Connect. Of course, there are also data showing that domestic funds do bypass Hong Kong and take advantage of the low cost of local funds to raise funds, which has increased the scale of funds from Shanghai to Hong Kong in the north. However, it should be said that most of the funds going north still have a real overseas background, which also conforms to the profit seeking characteristics of funds.

It can be seen that the most fundamental reason for the "hot in the north and cold in the south" situation in the Shanghai Hong Kong Stock Connect is the difference in the trend of the two markets. Where the market is good, capital will flow to which market. Obviously, the rise of the stock market is much more attractive than the undervaluation. From this point of view, Shanghai-Hongkong Stock Connect The interconnection effect is more convenient for funds to choose appropriate investment targets than to simply smooth the price difference between the two places. Whether this is a long-term phenomenon or just a short-term performance may be further studied, but in any case, this situation deserves great attention.

With the smooth operation of Shanghai Hong Kong Stock Connect, the opening of Shenzhen Hong Kong Stock Connect has also been put on the agenda. The latest news is that the Shenzhen Stock Exchange and the Hong Kong Stock Exchange are studying the scheme of Shenzhen Hong Kong Stock Connect. Some people said that since the valuation of small and medium-sized stocks traded on the Hong Kong Stock Exchange is lower than that on the Shenzhen Stock Exchange, after the opening of the Shenzhen Hong Kong Stock Connect, funds may be withdrawn from the Shenzhen Stock Exchange and copied Hong Kong shares Is this possible? Perhaps the practice of the Shanghai Hong Kong Stock Connect in the past two months has provided some reference. Investors can make specific analysis based on this to avoid collective misjudgment again.