HK-Shanghai Stock Connect Has Lukewarm Debut

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

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza