Mainland investors use up quota for HK stocks for first time

April 08, 2015 18:14
HKEx chairman Chow Chung-kong said the combined turnover of the Stock Connect program reached an all-time high of 29.9 billion yuan. Photo: HKEJ

The daily stock quota for Hong Kong stocks under the Shanghai-Hong Kong Stock Connect was used up for the first time since its inception in November last year, boosting the benchmark Hang Seng Index to a seven-year high.

Buying reached the daily limit of 10.5 billion yuan (US$1.69 billion) at 2:08 p.m. on Wednesday. The rally came after Chinese regulators last week allowed mutual funds to buy Hong Kong shares under the cross-border stock trading link.

The southbound turnover reached HK$20.95 billion. The northbound turnover also hit an all-time high of 13.18 billion yuan. The combined turnover reached an all-time high of 29.9 billion yuan, said Chow Chung-kong, chairman of the Hong Kong Exchanges and Clearing Ltd. (HKEx, 00388.HK).

The buying allowed the Hong Kong benchmark gauge to reach a seven-year high of 26,236, up by 961 points, or 3.8 percent. Trading volume of the HSI also reached a record high of HK$250 billion.

On the back of the rally of A shares, the HSI was up 432 points when the market opened and rose 971 points at its peak.

The Hang Seng China Enterprises Index, the main gauge for H shares, gained 5.7 percent to finish at 13,396.

The HKEx led HSI's rally as the blue-chip counter soared 12.2 percent to a record high of HK$220.

Hong Kong-listed A-share ETFs also performed well, with CSOP A50 ETF and iShares A50 ETF up 5 percent and 3.9 percent respectively.

Brokerage plays were also up; the turnover of the securities market reached an all-time high of HK$252.4 billion.

The Shanghai Composite Index rose 0.8 percent to close at 3,995 points, also a seven-year high.

The Shenzhen Component Index was up 0.5 percent to close at 13,841 points. Combined turnover on the two markets expanded to 1.55 trillion yuan.

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EJ Insight reporter