Glonghui, May 10 | Hong Kong Stock Exchange (0388.HK) jumped higher and rose more than 6% to HK$282 in the intraday period, reaching a new high since November 2023. According to the news, Bloomberg quoted people familiar with the matter as saying that China is considering reducing the 20% income tax that mainland individual investors need to pay when investing in Hong Kong stocks through the Hong Kong Stock Connect to receive dividends to avoid repeated taxation between the two places. If the relevant plan is implemented, it is expected to help further improve the liquidity of Hong Kong stocks and attract companies to Hong Kong to raise capital. CICC believes that if the Hong Kong Stock Connect dividend tax relief is implemented, it is expected to further boost the enthusiasm of mainland investors to invest in Hong Kong stocks, especially in sectors related to high dividends, boost sentiment in the short term, and help improve the liquidity of the Hong Kong stock market in the long term. According to estimates, the total dividend tax collected by the Hong Kong Stock Connect mechanism is about HK$45 billion each year. Assuming that mainland individual investors account for about 1/4 of the Hong Kong Stock Connect investment, it is estimated that the direct tax relief brought about by this potential adjustment will be around HK$10 billion each year. If public funds are included, the possible tax relief could be extended to around HK$20 billion.