Opening-up of financial market gathers steam

More exposure: An investor looks at screens showing stock market movements at a securities company in Anhui province. Since stock connect schemes were officially launched, the accessibility of China’s equity market has greatly improved. — AFP

SHENZHEN: The steady opening up of China’s financial market has invigorated foreign investors seeking to expand their investment and business horizons in the country, financial experts say on the sidelines of the just-concluded 2023 Global Investor Conference in Shenzhen.

Global investors can now invest in China’s capital market through more channels in a more convenient way, and are happy to see the further opening-up, Russell Jacobsen, head of China Access & Strategic Development, Equities Product at HSBC, told Xinhua.

Since the Shanghai-Hong Kong and Shenzhen-Hong Kong stock connect schemes were officially launched, the accessibility of China’s equity market has greatly improved, and the schemes have witnessed an expansion of eligible shares recently.

On March 13, the number of stocks eligible under the Shanghai-Hong Kong Stock Connect increased by 598 to 1,192, taking up over 90% of the market capitalisation.

Meanwhile, 436 shares were added to the Shenzhen-Hong Kong Stock Connect, bringing the total number to 1,336, covering 86% of the market capitalisation.

The recent expansion has been greatly welcomed by overseas investors.

Data showed that the net inflow to newly-added shares has reached US$2.5bil (RM11.4bil), accounting for more than half of the total inflow of northbound funds since the expansion.

Jacobsen said he hoped that regulators and exchanges would continue to consider accelerated inclusion of a wider range of stocks, bonds and exchange traded funds on a two-way basis.

The Stock Connect programme has also made enhancements to the trading calendars.

Starting from April 24, investors are allowed to trade on all days when both the Chinese mainland and Hong Kong markets are open.

It is hailed as a significant move to promote high-level two-way opening up of the capital market.

The move can help investors obtain more investment opportunities in different trading hours and reallocate their asset portfolios, said Charles Lui, managing director of Optiver China.

China has also made remarkable progress in opening up its bond market.

It approved a bond connect programme between the Chinese mainland and Hong Kong in 2017, allowing investors from both sides to trade bonds on each other’s interbank markets. — Xinhua

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