点击上方文字“安永EY”关注我们Patrick Law, William Huang and Ringo Choi told South China Morning Post their views on Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect schemes, as well as steps to protect investors. ![]()
Patrick Law thinks the Shanghai-Hong Kong Stock Connect scheme creates positive “chemistry” in recent HK market volume rally.
“By serving as a bridge to link up the Mainland and Hong Kong markets, it has boosted the capital flow between the two and enhanced liquidities for both. There have been encouraging policies that the market has seen. For instance, the China Securities Regulatory Commission opened door for mainland mutual funds trading Hong Kong stocks via Shanghai-Hong Kong Stock Connect.
“The China Insurance Regulatory Commission allowed insurance companies to trade [stocks on] Hong Kong GEM board. HongKong’s Mandatory Provident Fund has just been allowed to trade A shares through Shanghai-Hong Kong Stock Connect. The newly announced mutual fund recognition scheme which will allow registered asset managers in the mainland and Hong Kong to sell their fund products in the other’s market starting from July 1.”
By connecting the mainland and Hong Kong markets, it not only accelerates the opening up of Mainland market, but also enhances Hong Kong’s role as an international financial center, Law adds. “We have witnessed increased correlation between the two markets since the launch of Shanghai-Hong Kong Stock Connect, and such trend will be inevitable in the long run. ”
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William Huang believes Shenzhen has a geographical advantage over Shanghai. The Shenzhen-Hong Kong Stock Connect is expected to deepen the integration of the two cities. “We would expect the Shenzhen-Hong Kong Stock Connect will not only further strengthen the collaboration of the stock markets between Mainland and Hong Kong but also in the areas of finance and legislation.”
According to the data from HKEx as of 29 May 2015, northbound aggregate quota usage was 150.9 billion yuan (HK$191 billion), halfway to the ceiling of 300 billion yuan, while southbound aggregate quota usage was 96.5 billion yuan, less than 50% of the ceiling of 250 billion yuan. “We expect that the [Shenzhen-HongKong] scheme could be refined to better accommodate the need of thestakeholders,” Huang says.
Ringo Choi says that in recent years, the mainland and Hong Kong have released various policies to further strengthen the connection between two markets. “Along with the great development opportunities, there are also challenges as well. For instance, the influx of money also stimulated the vitality of the market. Two proposed measures [in the HKEx’s consultation paper] are designed to preserve market integrity in its securities and derivatives markets, and in a bid to safeguard the local financial market from systemic risks and boost its competitiveness.”
Volatility controls are a necessary mechanism in the age of electronic trading. And closing auctions are proven mechanisms for creating fair and efficient closing prices with reduced volatility, Choi says.
“They will benefit investors by reducing execution costs and execution risks. While the operations for the proposed measures are rather complex and may cause market interruption, it is important for regulators to take right measures to preserve market integrity and maintain a fair and effective financial market.”
To prevent fraud by listed companies, HKEx can consider strengthening information disclosures, enhancing punishment for illegal actions in the capital market, and more cooperation between mainland and Hong Kong regulators to protect investors on both sides, Choi says.
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