Date
23 August 2017
Cross-border stock trading between the Hong Kong (left) and Shanghai exchanges are expected to start soon. Photo: Now TV, Internet
Cross-border stock trading between the Hong Kong (left) and Shanghai exchanges are expected to start soon. Photo: Now TV, Internet

Investors upbeat on stock ‘trough train’, mutual recognition

Asian investors are showing increased interest in China thanks to looser rules on capital raising, according to a survey of the investment industry.

A cross-border stock trading scheme and potential mutual recognition of certain financial products and services are also helping brighten the mainland’s allure.

The four-week survey by Clifford Chance and AsianInvestor polled 243 respondents in the Asia Pacific fund industry.

Mark Shipman, global head of funds and investment management of Clifford Chance, said there has been “real buzz in Hong Kong” and an uptick in fund set-up activity, although it remains to be seen whether these initiatives will met expectations.

About 31 percent of the respondents said they are planning to sell new products in the region out of Hong Kong, encouraged by the “through-train” stock trading program.

The figure is up from 23 percent last year.

Nearly half said Hong Kong and mainland China will provide the best platform for investment growth compared with 18 percent that picked Singapore.

“China is not only a top investment destination but also now a favorite jurisdiction for capital raising, tied with North America at 33 percent,” Clifford Chance said in a statement Thursday.

Meanwhile UBS A.G. put Hong Kong Exchanges and Clearing Ltd. (HKEx, 00388.HK) on its least preferred list, saying the impact of the upcoming cross-border trading on its earnings per share has been overestimated.

It said expectations of a 5 percent to 10 percent gain are too optimistic, according to news portal AAStock.

JPMorgan Chase & Co. also lowered its recommendation on HKEx to neutral from buy after the stock surged 45 percent in the past four months, news portal ET Net said.

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