HKEx’s discussions with mainland exchanges over mutual market access has turned the spotlight again on the A-shares discount vs their HK-listed peers.
** While no agreement announced yet news comes on the back of series of incremental developments geared towards attracting more foreign money into mainland stock markets.
** HKEx news comes a month after MSCI said it was evaluating including A-shares into its EM indices.
** Recent widening of CNY trading band and further expansion of RQFII/QFII quotas all pointing in the same direction.
** Meanwhile, China stocks’ chronic underperformance has taken the A-H premium index back to 2014 lows.
** A-shares starting to nudge ahead of H-shares on 2014 performance. link.reuters.com/mav28v
** Sentiment around EM turning slowly and within that P/E differential between China & EM lowest in more than a decade. link.reuters.com/wax97v
** Risk-reward likely favours going long A-shares, via the iShares FTSE A50 ETF, vs HK-listed China.
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