Something of a landmark day in HK’s stock markets on Thursday as details of a plan that allows freer cross-border investment takes the CSI300 & the Hang Seng back to third-plenum levels.
** A six months preparation period for all this to go through so some caution warranted.
** Announcement changes some of the mechanics of the HK-China stock markets.
** Stocks like Macau gaming, Tencent, AIA i.e. that mainland investors do not have access to in Shanghai & Shenzhen - are likely to be of most interest to mainland investors.
** Assuming daily quota of 10.5 billion yuan ($1.69 billion)is used up that would take HKEx's daily volume up nearly fifth more than making up for the boost it would've got from an Alibaba IPO. link.reuters.com/jym48v
** Meanwhile H-shares trading at a significant premium to corresponding A-shares are likely to be under pressure. Top 5 H to A premiums: link.reuters.com/tym48v
** Quant & arbitrage funds could get active as the A-H spreads narrow, deepening the market.
** Scepticism runs deep in some quarters but HK/China regulator have surprised the market with specifics and speed of announcement.
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