China announced it would quadruple the daily quota of its stock connect mechanisms between the Chinese mainland and Hong Kong from May 1. It is predicted to play an active role in the price discovery mechanism for the country's capital market, according to Jiang Han, a research fellow at the Suning Financial Research Institute, in an interview with this journalist on Thursday.
China released its timetable for a broader financial opening-up on Wednesday at the Boao Forum for Asia. Improving the stock market connectivity was on the schedule among those approaching financial policies.
The daily quota for the Shanghai Stock Connect and the Shenzhen Stock Connect will be increased from RMB 13 billion to RMB 52 billion, while that for the Hong Kong Stock Connect from RMB 10.5 billion to RMB 42 billion after the adjustment.
Jiang said to this journalist that the increase would bring a more frequent capital exchange between China and the outside world.
"We will see a more open and free financial market in China, which is a major trend of the future. Promoting a further opening-up of the Chinese financial market is the most significant aspect from the increase of the stock connects daily quota," he said.
He also mentioned that it would further facilitate the price discovery mechanism for China's financial market.
Jonas Short, head of Beijing Office at Everbright Sun Hung Kai, said that the move should reflect positively for brokers, whom will benefit in trade commissions from increased flows, not just from the connect program but also from CDR issuance.
He held that this could also be in preparation for further the MSCI inclusion.
Jiang had a similar view that a further opening-up would obviously benefit the MSCI inclusion. Moreover, the increase of the quota could help brokers but would have little influence on ordinary investors.
"More opening-up partly brought about by the increase of the stock connect daily quota will also help the stability and health of China's financial market," Jiang said.
Zhu Yaming, a manager from Ernst & Young (EY), said that the expansion of the daily the sock connect quota would be necessary for China's bilateral opening-up of its financial market, which would be carried out step by step. Thus, it would help to promote the RMB's internationalization.
According to Tonghuashun statistics, since April this year, the Shanghai Stock Connect has accumulated a net capital inflow of RMB 8.568 billion, and the Shenzhen Stock Connect of RMB 3.899 billion. In total, there have been net inflows of RMB 12.467 billion northward.
Four stocks, Kweichow Moutai, the Inner Mongolia Yili Industrial Group, Jiangsu Heng Rui Medicine and the Midea Group, have gained a trading volume of over RMB 3 billion since April this year, with RMB 4.188 billion, RMB 3.876 billion, RMB 3.621 billion and RMB 3.043 billion respectively.
China released its timetable for a broader financial opening-up on Wednesday at the Boao Forum for Asia. Improving the stock market connectivity was on the schedule among those approaching financial policies.
The daily quota for the Shanghai Stock Connect and the Shenzhen Stock Connect will be increased from RMB 13 billion to RMB 52 billion, while that for the Hong Kong Stock Connect from RMB 10.5 billion to RMB 42 billion after the adjustment.
Jiang said to this journalist that the increase would bring a more frequent capital exchange between China and the outside world.
"We will see a more open and free financial market in China, which is a major trend of the future. Promoting a further opening-up of the Chinese financial market is the most significant aspect from the increase of the stock connects daily quota," he said.
He also mentioned that it would further facilitate the price discovery mechanism for China's financial market.
Jonas Short, head of Beijing Office at Everbright Sun Hung Kai, said that the move should reflect positively for brokers, whom will benefit in trade commissions from increased flows, not just from the connect program but also from CDR issuance.
He held that this could also be in preparation for further the MSCI inclusion.
Jiang had a similar view that a further opening-up would obviously benefit the MSCI inclusion. Moreover, the increase of the quota could help brokers but would have little influence on ordinary investors.
"More opening-up partly brought about by the increase of the stock connect daily quota will also help the stability and health of China's financial market," Jiang said.
Zhu Yaming, a manager from Ernst & Young (EY), said that the expansion of the daily the sock connect quota would be necessary for China's bilateral opening-up of its financial market, which would be carried out step by step. Thus, it would help to promote the RMB's internationalization.
According to Tonghuashun statistics, since April this year, the Shanghai Stock Connect has accumulated a net capital inflow of RMB 8.568 billion, and the Shenzhen Stock Connect of RMB 3.899 billion. In total, there have been net inflows of RMB 12.467 billion northward.
Four stocks, Kweichow Moutai, the Inner Mongolia Yili Industrial Group, Jiangsu Heng Rui Medicine and the Midea Group, have gained a trading volume of over RMB 3 billion since April this year, with RMB 4.188 billion, RMB 3.876 billion, RMB 3.621 billion and RMB 3.043 billion respectively.
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