Shenzhen Stock Connect sees lacklustre launch

Monday was the first day of operations for the Shenzhen-Hong Kong Stock Connect trading link but activity was subdued in comparison to the launch of its Shanghai equivalent.
By Paul Walsh
The Shenzhen-Hong Kong Stock Connect trading link has seen an underwhelming first day of operations following yesterday’s launch.

Northbound Shenzhen trades stood at RMB 2.7bn, around a fifth of the RMB 13bn quota, compared to RMB 6.8bn achieved on the Shanghai link yesterday.

The results represent a stark contrast to the launch of the Shanghai trading link in 2014, which saw investors consume the entire RMB 13bn quota on the first day.

Other results from the launch day revealed that total shares traded northbound from Shenzhen stood at 163 million while the Shanghai Stock Connect achieved total shares traded of 587 million.

Having received approval from the Chinese government in August, the Hong Kong trading link was given a 5 December start date at the end of November following final approval from Hong Kong’s Securities and Futures Commission and the China Securities Regulatory Commission.

It is hoped that the venture will allow investors to more easily access both mainland China and Hong Kong markets, increase cooperation between the two and consolidate Hong Kong’s position in the financial industry.