China has announced plans to connect the stock exchanges of Hong Kong and Shanghai, allowing a combined 23.5 billion yuan (US$3.8 billion) of daily cross-border trading.
Investors will be able to trade 10.5 billion yuan of Hong Kong-listed stocks through the Shanghai exchange and 13 billion yuan of mainland China shares through Hong Kong, the China Securities Regulatory Commission said in a statement yesterday.
That is equivalent to about 21 percent of the average daily value of shares traded in Hong Kong over the past year, and 14 percent of daily trading on the Shanghai Composite Index, according to data compiled by Bloomberg.
Photo: Bloomberg
“The quota will have a significant impact on the Hong Kong market because it accounts for about a quarter or fifth of the daily turnover,” Delta Asia Securities Ltd strategist Sam Chi Yung (岑智勇) said.
“The quota amount is a starting point,” and may be increased, he said.
The aggregate quotas for the cross-border trading are 250 billion yuan for Hong Kong-listed stocks and 300 billion yuan for Shanghai shares, Hong Kong’s Securities and Futures Commission (SFC) said.
The limits may be adjusted in the future, and preparations for the link will take about six months, according to a statement from the regulator.
Connecting the exchanges will “further improve the opening and healthy development of capital markets in China and Hong Kong,” Chinese Premier Li Keqiang (李克強) said yesterday at the Boao Forum on China’s Hainan Island. Stocks with a primary listing in Shanghai have a market value of US$1.94 trillion, compared with US$3.56 trillion for Hong Kong, data compiled by Bloomberg showed.
Individual investors in mainland China need at least 500,000 yuan in their securities account to take part in the trading link, according to the SFC.
“This is good news for Hong Kong stocks,” Guotai Junan Securities Co (國泰君安證券) analyst Shirley Gu (古喬藝) said by telephone in Shenzhen. “It’s not about the quota now — the key is that the expectation is realized and this is now a certainty. This could attract new foreign investors and more active trading in Hong Kong.”
Mutual access would boost trading volumes and improve profitability for Hong Kong’s exchange, AMTD Financial Planning Ltd (尚乘財富) general manager Kenny Tang (鄧聲興) said.
It would also help the Shanghai market in the long run as foreign investors buy cheap shares, while mainland Chinese individuals would have the option to invest in Hong Kong stocks, Tang said.
MORE THAN BUZZ: The chip designer said it has received numerous orders from automakers to supply 5G modem chips, as it works to expand beyond smartphones MediaTek Inc (聯發科) yesterday said it would ship the first 5G chips for vehicles to customers in the Asia-Pacific region by the end of the year, as it moves to expand the reach of its 5G chips beyond smartphones. The Hsinchu-based chip designer said it has been developing 5G chips for connected vehicles over the past few years, targeting applications such as telematics and in-vehicle information systems. “We are seeing demand for 5G technology from numerous makers of connected cars, including electric vehicle makers. We have obtained numerous orders from automakers to supply 5G modem chips with highly integrated features,” J.C. Hsu
AVOIDING CONFUSION: Passengers are to be able to check in two items of luggage, while the free weight allowance is to be increased to conform with other airlines EVA Airways Corp (長榮航空) yesterday announced that from June 23 it is to adopt a new baggage allowance policy for all passengers with a higher weight limit as it aims to benefit passengers and increase efficiency. The airline currently has a two-system baggage policy: It allows passengers flying to the US and Canada to check in two pieces of baggage with a free weight allowance, while for those flying to Asia, Europe and Oceania there is also a free weight allowance, but no limit on the number of pieces of baggage. From June 23, passengers would be able to check in two
INVENTORY DOUBLED: Key parts have backed up in warehouses, halting notebook production, as Acer’s CEO said that a gradual reopening would not solve the problem PC vendor Acer Inc (宏碁) yesterday said that lockdowns in China to control COVID-19 upended key component supply and disrupted PC production, although chip shortages have been improving. While chip supply constraints largely eased in the first quarter, the company faces uneven supplies of key components due to COVID-19 restrictions in China, Acer chairman and CEO Jason Chen (陳俊聖) told an online news conference. “Semiconductor shortage was the biggest problem in the first half of last year,” Chen said. “Now, we are beset by a supply chain issue caused by China's lockdowns.” With key components unable to be delivered and backing up in
Qualcomm Inc yesterday said it would maintain its supply chain strategy of sourcing chips from multiple foundry partners, including advanced chips from two major suppliers, to ensure a sufficient chip supply amid the COVID-19 pandemic. Qualcomm is reportedly working with Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co on advanced products, such as 4-nanometer chips, for its new flagship 5G chips, the Snapdragon 8+ Gen 1 series. Qualcomm is sourcing chips made by mature technologies from several foundry partners, the company said. Alex Katouzian, general manager of Qualcomm Technologies Inc’s mobile, compute and XR business, told a virtual media briefing that
RSS