On December 5 last year, the Shenzhen-Hong Kong Stock Connect was officially launched, marking the comprehensive sailing of the Shanghai, Shenzhen-Hong Kong common market.
On the occasion of the first anniversary of the launch of the Shenzhen-Hong Kong Stock Connect, Hong Kong Exchanges and Clearing and Shenzhen Stock Exchange jointly launched a series of interviews on the one-year value tour of the Shenzhen-Hong Kong Stock Connect, inviting regulators, executives of popular companies connected to Hong Kong stocks, and Hong Kong market experts to talk about the "first anniversary of the Shenzhen-Hong Kong Stock Connect" with investors.
On December 12, Futu interviewed Dr. Wang Yixuan, head of the Hong Kong subsidiary of Shenzhen Stock Exchange, and Mr. Zhou Xiaoyin, Senior Vice President of China customer Relations and Marketing Department of Hong Kong Exchanges and Clearing Market Development Department.
Wang Yixuan said in an exclusive interview that the current market value of Shenzhen Stock Exchange is close to QFII, and foreign investors prefer industry leaders and better-growing companies. Zhou Xiaoyin pointed out that at present, the average daily turnover of Hong Kong stocks accounts for more than 7% of the turnover of the Hong Kong stock market, and mainland funds have now become a force that cannot be ignored in the Hong Kong stock market. At the same time, he also said that he would continue to optimize and upgrade the interconnection mechanism and add products such as ETF in the future.
The market value of Shenzhen shares is close to QFII, and foreign investors prefer industry leaders.
The proportion of the trading volume of (Shenzhen Stock Connect) in the total trading volume of A shares in the Shenzhen stock market has increased from 0.27% in the first month of opening to 1.35% in the most recent month. The market value of Shenzhen Stock Tong's holdings has also increased from 14.6 billion yuan in the first month to 186.3 billion yuan now. That figure is close to the market value of QFII's holdings. Wang Yixuan pointed out that the degree of foreign investors' participation in the Shenzhen market through Shenzhen Stock Connect is gradually increasing, and their participation has optimized the structure of Shenzhen traders.
According to her, the average daily buying and selling turnover of Shenzhen Stock Exchange has increased from 1.5 billion yuan a month when it first opened to 7.4 billion yuan a month, with Shenzhen shares accounting for 45 per cent of the total turnover in the northbound direction. Of the total amount of A-shares traded by foreign investors through Shenzhen Stock Connect, the trading volume of small and medium-sized boards and gem accounts for 56%, and the market value of their holdings accounts for 49%.
"(foreign investors) stocks with relatively high shareholdings are mainly industry leaders and growth stocks that represent the characteristics of the Shenzhen stock market. For example, Haikangwei TV, Boss Electric Appliances, Dazhong Laser and so on. Wang Yixuan said, "judging from the overseas roadshow, the response from foreign investors is very enthusiastic. The enterprises with entrepreneurial and innovative characteristics included in Shenzhen Stock Exchange have become an internationally recognized emerging asset class, and foreign investors are very concerned about the growth of these enterprises. "
The share of Hong Kong stock market turnover has increased tenfold, and the shareholding amount has exceeded HK $800 billion.
From its opening on November 4, 2014 to mid-November this year, the turnover of the Hong Kong Stock Connect has exceeded HK $3.327 trillion, bringing a net inflow of HK $637.5 billion to the Hong Kong stock market. The amount of shares held by mainland investors using Hong Kong Stock Connect to invest in Hong Kong stocks has reached HK $808.8 billion, more than double that at the end of 2016. "the share of Hong Kong Stock Connect's trading volume in the Hong Kong stock market has also increased," Zhou Xiaoyin said. When it first opened in 2014, Hong Kong Stock Connect accounted for only about 0.73% of the investment. So far, it has exceeded 7.1%. "
Zhou Xiaoyin believes that mainland investors are becoming important participants in the Hong Kong stock market. Moreover, mainland investors' understanding of the Hong Kong stock market has also made a qualitative leap compared with last year, and they have a deeper understanding of the mechanisms of the Hong Kong stock market, such as no limit for ups and downs, short selling, and so on. He pointed out that the valuations of Hong Kong stock companies familiar to some mainland investors had improved and improved.
In addition, as of October 31 this year, the Shanghai Stock Connect and Shenzhen Stock Connect had accumulated turnover of 4.055 trillion yuan, bringing a net capital inflow of 326.3 billion yuan to the mainland stock market. Hong Kong and overseas investors hold a total of 310.3 billion yuan in Shanghai stocks and 181.4 billion yuan in Shenzhen stocks.
From the point of view of the net inflow of the channel, the net inflow of funds from the south is more than that from the north. Zhou Xiaoyin believes that, on the one hand, it is due to the demand of mainland investors for overseas asset allocation; on the other hand, in recent years, the valuation of the Hong Kong stock market is relatively low compared with the stock markets around the world, both vertically and horizontally.
Zhou Xiaoyin also mentioned that investors' investment preferences under Hong Kong Stock Connect (Shanghai) and Hong Kong Stock Connect (Shenzhen) are different. Hong Kong Stock Connect (Shanghai) is dominated by large blue chips and cyclical stocks, and the target change and rotation are not obvious. The top ten stocks traded in Hong Kong Stock Exchange (Shenzhen) are very different every month, and the change of hands and rotation are very obvious.
The smooth operation of Shenzhen-Hong Kong Stock Connect has won the trust of regulators and investors and will be included in ETF in the future.
Behind the impressive trading data is investors' affirmation of the interconnection mechanism. In fact, the smooth operation and continuous optimization of the interconnection mechanism have greatly enhanced the attractiveness of the A-share market to foreign investors, which has also contributed to the inclusion of A-shares in the benchmark index by MSCI this year.
When the Shenzhen-Hong Kong Stock Connect was opened, the interconnection mechanism was optimized and upgraded, which not only increased the target for foreign investors to invest in A-shares, but also removed the total quota limit, dispelling foreign investors' concerns about liquidity. In addition, the policy for mainland insurance funds to participate in the Shenzhen-Hong Kong Stock Connect has also been clarified one after another.
According to Zhou Xiaoyin, Hong Kong Exchanges and Clearing will actively promote the extension of the interconnection mechanism to ETF in the future.
In addition to improving the mechanism, maintaining communication with investors is also an important reason for the smooth operation of the interconnection market. It is reported that the Shenzhen Stock Exchange has held 123 roadshows for more than 600 overseas institutions. The HKEx has also cooperated with the Shenzhen Stock Exchange to launch a series of offline activities in the mainland, including entering Hong Kong listed companies, entering the business department, investment services to the west, and so on. (author / Lu Yanjun)