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Shenzhen-HK stock link set to start trading on Dec 5

Shenzhen-Hong Kong Stock Connect will officially start trading on December 5, as announced by China Securities Regulatory Commission and Securities & Futures Commission of Hong Kong on Nov 28.

The highly anticipated stock connect program to link markets between Shenzhen and Hong Kong are now on a 1-week-count-down.

On December 5, investors in the mainland will be able to trade shares listed in the HK market, and vice versa. Experts say it’s a big step closer to push the Chinese capital market towards the global markets.

Chief researcher of Southwest Securities, Zhang Shiyuan, said, “The opening of Shenzhen-Hong Kong Stock Connect is a special channel for the Chinese capital market to integrate with the international markets. It’s an important step for the development of the Chinese equity market.”

This means, around 40 percent of the 540 Chinext listed Chinese firms will have the chance to attract foreign investment funding, through the connector.

Lu Zhen, manager of wealth management with Galaxy Securities, “Shenzhen-Hong Kong Stock Connect is a very innovative method. For mainland investors, especially high net-worth ones, it will be a convenient channel for overseas asset allocation. Mainland investors will also gain a bit of pricing power over share prices in the Hong Kong market.”

The stock link will not set a cap for total trading quota. But it will maintain a daily transaction limit of about 13 billion yuan each way.