Big day for the Chinese markets -- the trading link between the Shenzhen and Hong Kong stock exchanges started Monday.
At the close, Hong Kong investors had purchased around 3 billion yuan of stock in Shenzhen. That's equivalent to roughly 21% of the total daily trading quota.
Southbound flows were equally muted at around 850 million yuan. Our reporter Wu Lei was at the Shenzhen exchange and brings us more.
Officially online.The landmark Shenzhen-Hong Kong stock connect scheme is now a reality. From now on, investors will be able to trade selected stocks between the Shenzhen and Hong Kong bourses, a move described as a milestone in global capital markets.
881 stocks on the Shenzhen Stock Exchange are eligible for trading, while 417 are available on the Hong Kong Stock Exchange. The new link between the two capital markets is seen as the latest reform by China.
"After the successful Shanghai-Hong Kong stock connect, today we have the new Shenzhen-Hong Kong link. This fully shows the central government's determination to further boost the opening up of China's financial and capital markets." Said Liu Shiyu,chairman of China Securities Regulatory Commissions.
Many securities have already received several applications for accounts and consultations.
"Many investors are coming to open accounts. Actually the Shenzhen Hong Kong stock link is another investment option for them, especially for those who need overseas asset allocation."said Zhou Zhengye,wealth consultant of China Merchants Securities Co. LTD.
The capital threshold for mainland investors is set at a minimum of 500 thousand RMB in securities and capital accounts combined. The stock link will not set a cap for total trading quota. But the daily transaction limit is 13 billion RMB for Hong Kong investors, and 10-point-5 billion RMB for mainland investors.
The transaction currency used on both stock exchanges is the Chinese yuan. Experts say the new stock connect program will further facilitate cross border RMB flow and step up the currency in its efforts to go global.
