Date
27 July 2017
The Shanghai-Hong Kong Stock Connect, launched a year ago, hasn't brought about any significant jump in mainland capital flows to Hong Kong. Photo: HKEJ
The Shanghai-Hong Kong Stock Connect, launched a year ago, hasn't brought about any significant jump in mainland capital flows to Hong Kong. Photo: HKEJ

Stock Connect hasn’t met expectations, say China brokers

Mainland brokerages are saying that the business generated by the Shanghai-Hong Kong Stock Connect program has failed to match expectations, both in terms of the transaction volume and the number of new trading accounts.

GF Securities Co. (01776.HK) is among the firms that have expressed disappointment about the business from the cross-border stock link, the Hong Kong Economic Journal reported. 

The Chinese brokerage saw only 55,200 accounts opened by mainlanders for investing in Hong Kong stocks.

The number represented just 0.94 percent of the broker’s total number of clients as of the end of September.

And among those who opened securities accounts for southbound investments, only 11,400, or about 20 percent, actually made any transactions.

The number of people who made more than two transactions was even less, at 10,200.

The report cited Wang Xindong, an assistant to GF Securities president, as saying that it may take some time for mainland investors to get a grasp of the Hong Kong stock market.

Zang Min, an official with Huatai Securities Co. (06886.HK), said differences in regulations between Hong Kong and mainland markets have given rise to special rules in the Stock Connect that have limited the investment scope and quotas.

He called on authorities on both sides to work out a more compatible transaction mechanism for the stock link. 

Although the Shanghai-Hong Kong Stock Connect has fallen short of expectations, Wang and Zang both said they are looking forward to the upcoming trading link between Hong Kong and Shenzhen bourses. 

The Shenzhen version of the stock link will hopefully enhance the client structure of the brokerages and generate significant business, they said.

[Chinese version中文版]

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