The highly-anticipated Shanghai-Hong Kong Stock Connect met a lackluster response during its first week, but strategists aren’t writing off the program yet as the so-called “through train’s” engine is just warming up.
The cross-border trading scheme filled 36 percent of its “northbound” quota and just 6 percent of its “southbound” quota last week, according to Reorient Research, which characterized the launch week as a “bust.”
Under the program, mainland stock purchases are capped at 13 billion yuan a day. Buying of Hong Kong stocks is limited to 10.5 billion yuan daily.
“Towards the end of the week, people saw that quotas were being used less and less, and lost interest. On top of this, stock markets were under pressure, so people weren’t keen to jump in,” Steve Wang, research director and chief China economist at Reorient Group told CNBC on Monday.
via CNBC
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Alfonso Esparza