A possible delay in the launch of the Shanghai-Hong Kong Stock Connect program would have little impact on the local stock market, the Hong Kong Economic Journal reported Tuesday.
In fact, an improvement in the mainland stock trading performance would help boost investment sentiment, Will Leung, Standard Chartered Bank’s head of investment strategy of wealth management department, was quoted as saying.
The cross-border stock trading scheme, which allows mutual stock market access for investors in mainland China and Hong Kong, was first announced in April. A joint circular released by both bourses said there would be a six-month preparation before the official launch.
Test trading at the two bourses began in early August, and the market expected an official launch by the middle of October.
However, the absence of an announcement has fueled speculation that the program may be delayed for a short while, the report said.
According to a Standard Chartered survey, about six in 10 Hong Kong investors plan to raise their investment in renminbi assets after the connection of the two bourses.
The survey showed that investors on average would allocate 9 percent more of their current assets portfolio to invest in renminbi products.
However, most of them maintain a cautious stance, saying they would invest only if they see a favorable market environment.
Meanwhile, Reuters reported that regulators may exempt the Stock Connect program from capital gains tax in a bid to attract more investors at home and abroad.
Under current tax regime, China levies a 10 percent capital gains tax on foreign institutional investors trading in Chinese stocks.
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