Date
18 November 2017
Guests attend the launch of the Shenzhen Connect at the Hong Kong Exchanges and Clearing on Monday. Photo: Reuters
Guests attend the launch of the Shenzhen Connect at the Hong Kong Exchanges and Clearing on Monday. Photo: Reuters

Shenzhen-Hong Kong trading link gets off to slow start

Investors gave a muted response to Monday’s launch of the much-awaited Shenzhen-Hong Kong Connect stock trading link.

Chinese investors poured 850 million yuan (US$123.4 million), representing only 8 percent of the daily quota, into Hong Kong stocks, while north-bound trade reached 2.71 billion yuan (US$393.5 million), or 21 percent of the limit, the Wall Street Journal reports.

At the end of the day’s trading, the Shenzhen Composite Index closed down 0.78 percent, while the Hong Kong benchmark Hang Seng Index slipped 0.26 percent.

The lukewarm trading was blamed on a number of events that weighed on global markets during Asian trading hours, the newspaper said. 

Italy’s Prime Minister Matteo Renzi resigned after losing a key referendum vote, while US President-elect Donald Trump criticized China’s currency and trade policies via Twitter.

The stock trading link allows global investors to trade 881 shares listed in Shenzhen and opens more Hong Kong stocks to mainland investors.

Despite the slow start, the Shenzhen market is expected to attract global investors with its wealth of companies in faster-growing parts of economy, considering that the Shanghai market is dominated by less dynamic state-owned enterprises such as banks and oil companies, the Journal said.

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RA/CG

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