According to the APP of Zhitong Finance, the Shanghai Stock Exchange issued a notice on March 12 to adjust the list of shares of the Shanghai-Hong Kong Stock Connect, which will take effect from the next Hong Kong Stock Connect trading day. It will enter into force on March 15, 2021. Among them, Weimeng Group (02013), Pop Mart International (09992), China Resources Mixc Lifestyle Services (01209), Jiumaojiu (09922), Blue Moon (06993), Xinyi Energy (03868) and other companies were transferred.
This means that mainland investors can entrust mainland securities companies to declare and buy and sell these shares to the Hong Kong Stock Exchange through the securities trading service company set up by the Shanghai Stock Exchange in Hong Kong.
In 2014, Hong Kong Exchanges and Clearing launched the Shanghai-Hong Kong Stock Connect mechanism, which allows international investors to invest directly in the mainland stock market through Hong Kong. The connectivity mechanism initiated by the Shanghai-Hong Kong Stock Connect was extended to the Shenzhen-Hong Kong Stock Connect and the Bond Link in 2016 and 2017 respectively.
On September 9, 2019, Weimeng Group was officially included in the list of Hong Kong Stock Connect (Shenzhen). The inclusion of the Shanghai-Hong Kong Stock Connect means that the Shanghai-Hong Kong Stock Connect recognizes its inherent investment value and helps to have a positive impact on its liquidity, valuation and many other aspects.
From a macro point of view, the Hong Kong Stock Connect is already an important channel for southward funds from the mainland to participate in Hong Kong's capital market. In recent years, with the complementary nature of the capital markets of the two places becoming more and more prominent, the proportion of mainland capital in the Hong Kong stock market is increasing year by year, which continues to affect the ecology of Hong Kong stocks. At the beginning of this year, southward capital accounted for 30.11% of Hong Kong stock turnover.
The transfer to the Shanghai-Hong Kong Stock Connect, similar to the transfer to the Shenzhen-Hong Kong Stock Connect, will significantly improve the liquidity of listed companies and become the best way for Hong Kong stock companies to enhance their attractiveness to mainland investors. Take the Weimeng Group as an example, the trading volume of the Weimeng Group nearly tripled on the day it was incorporated into the Hong Kong Stock Connect (Shenzhen).
Since joining the Shenzhen-Hong Kong Stock Connect, the proportion of Weimeng Group Hong Kong Stock Connect has continued to rise, reaching 21.91% by March 12. Since joining the Shenzhen-Hong Kong Stock Connect, Weimeng's shares have risen 388 per cent as of March 12.
Source: Zhitong Finance APP
Now, after the Shenzhen-Hong Kong Stock Connect, entering the Shanghai Stock Connect can not only attract southward capital attention for Weimeng, enhance the activity of the secondary market, but also enjoy the upward valuation brought about by the increase in liquidity to a certain extent.
Since its listing on the HKEx on January 15, 2019, Weimeng Group has been included in the Hang Seng Composite Index, including Hang Seng Consumer goods Manufacturing and Services Index, Hang Seng Hong Kong Stock Connect Index, Hang Seng Hong Kong Stock Connect small and medium Index, MSCI Index and Hang Seng Technology Index. Weimeng Group has been the focus of capital pursuit since its listing, with its share price outperforming the Hang Seng Index and is now up 628 per cent compared with its share price.
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