China boosts Stock Connect quotas

The Hong Kong-Shanghai Stock Connect is getting an update.

The number of shares investors can trade and the trading quota will both be expanded, a securities regulator official said Tuesday.

In addition, the proposed Hong Kong-Shenzhen Stock Connect scheme will continue as planned said Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), according to a statement on the regulator’s website.

Fang’s comments come on the one-year anniversary of the Shanghai Stock Connect, which was created to attract large amounts of foreign fund flows into Chinese stocks. But so far, it has failed to fill its current quotas.

The expansion had been planned to go into effect once the project had reached maturation.

However, all the plans including the Shenzhen expansion were all halted during the summer stock market crash, as regulators worked to stop the rout.

Global banks and investors have also warned Chinese regulators that proposals to curb high-speed trading, blamed for the crash, would inadvertently sabotage major investment channels worth around $160 billion, including the Stock Connect scheme, reported Reuters.

Fang’s comments are seen as a response to growing fears in the market that Beijing is responding to the summer rout by halting or even reversing reforms to allow greater access to its capital markets



Categories: Asia Unhedged, China

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