As mainland investors buy the Hong Kong-traded H-shares corresponding to mainland A-shares, discounts between the two markets are shrinking. Here’s a rundown of the discounts between mainland and Hong Kong prices. The rising quota of Hong Kong purchases assigned to mainland investors will eventually shrink the premium, but we don’t know in advance whether that will occur through a fall in the A-share price or a rise in the H-share price, or both. Asia Unhedged favors the latter view, but it’s caveat emptor.
Categories: Asia Unhedged