Transaction volume in the city’s warrants market is expected to hit an average of HK$10 billion a day this year, up 30 percent from the level last year, the Hong Kong Economic Journal reported Thursday.
The growth may come as investment sentiment in Hong Kong improves, the report cited Société Générale S.A. as saying.
Driven by demand for individual stocks under the Shanghai-Hong Kong Stock Connect scheme, capital has been flowing into the warrants of several counters.
Last year, HK$210 billion of capital poured into the warrants of iShares FTSE/Xinhua A50 China ETF (02823.HK).
Tencent Holdings Ltd. (00700.HK) warrants attracted inflows of HK$1.41 billion, and HK$410 million went into warrants of Hong Kong Exchanges and Clearing Ltd. (00388.HK).
Trading in the Tencent warrants made up 19.1 percent of the total transaction volume in the cash market at the end of last year, compared with 7 percent a year earlier, Eva Choi, vice-president of global equity at Société Générale, said Wednesday.
Mainland financial plays, property and infrastructure counters are among those that could benefit from capital flowing into H shares, as the A/H share spread has widened in favor of A shares after the launch of the stock through train, the firm said.
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