Hong Kong, China stocks jump on plans for cross border investment

Thu Apr 10, 2014 5:36am EDT

Related Topics

* HSI +1.5 pct; H-shares +0.4 pct; CSI300 +1.6 pct

* China's weak exports weigh on early market sentiment

* Cross-border investment rules boost blue chips, dual listings

SHANGHAI, April 10 (Reuters) - Hong Kong shares closed at their highest level in more than three months on Thursday, lifted by news that Beijing's securities regulator will allow cross-border stock investment between Hong Kong and Shanghai.

The announcement also boosted mainland indexes, with the Shanghai composite index reaching a two-month high.

The Hang Seng Index ended up 1.5 percent, its highest close since Jan. 2. The China Enterprises Index of the top Chinese listings in Hong Kong increased 0.4 percent.

The Shanghai Composite Index ended up 1.4 percent at 2,134.3 points. The CSI300 of the leading Shanghai and Shenzhen A-share listings rose 1.6 percent. Both indexes closed at their highest since Feb. 20.

The new rules will allow mainland investors to trade shares in designated companies listed in Hong Kong, and at the same time let Hong Kong investors buy shares in Shanghai-listed firms.

An initial pilot will limit the amount invested in Hong Kong to 250 billion yuan ($40.32 billion) overall, with a 10.5 billion yuan daily quota. Hong Kong will also require mainland investors to be institutions or individuals with 500,000 yuan in their accounts.

Foreign investment in mainland shares will be limited to those listed in Shanghai.

Securities firms were the biggest winners on the two bourses, with Hong Kong listed CITIC Securities Co Ltd gaining 9.2 percent and Haitong Securities Co Ltd climbing 7.5 percent.

Mainland leaders were Ping An Insurance Group of China , up 7.1 percent, while CITIC Securities Co Ltd increased 9.7 percent, their biggest one-day percentage gains since Nov. 18. CITIC shares were their most heavily traded since Oct. 2010. Sinolink Securities Co Ltd gained 5.2 percent.

This pushed the CSI300 financial sub-index to heights not seen since late last year.

For Hong Kong the new rules will be of most benefit to H-shares, which have traded at discounts compared with their mainland-listed counterparts.

Yanzhou Coal Mining Co Ltd jumped 6.2 percent, while China Oilfield Services Ltd gained 5.8 percent and China Coal Energy Co was up 1.8 percent.

Tencent Holdings Ltd, was another major gainer, 7.6 percent, its highest one-day percentage gain since end-2011. (Reporting by Natalie Thomas; Editing by Jacqueline Wong)

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