Citizens in front of a billboard advertising the Shanghai-Hong Kong Stock Connect, in south China's Hong Kong in April, 2015.(Xinhua/Lui Siu Wai)
BEIJING, Aug. 17 (Xinhua) -- China approved recently optimization of the trading days calendar for Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect schemes, which, as market players estimated, is likely to halve the currently unavailable trading days under the schemes.
-- Trading on all common trading days to be available for investors
The trading says calendar here refers to all the trading days in a year on which investors from the Chinese mainland and Hong Kong Special Administrative Region (HKSAR) can trade stocks in both markets under the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programs.
When the Shanghai-Hong Kong Stock Connect was launched in 2014, due to the differences in public holidays and settlement arrangements, the stock exchanges and clearing companies in Shanghai and Hong Kong agreed that trading is available for investors only in trading days when both the markets are open and which meet related requirements on settlement services. Such arrangements were adopted when the Shenzhen-Hong Kong Stock Connect was rolled out in 2016.
An official with China Securities Regulatory Commission (CSRC) said that after the optimization, Shanghai Stock Exchange, Shenzhen Stock Exchange and the Stock Exchange of Hong Kong will concurrently allow trading under Stock Connect on all trading days when the three markets are open.
By then, the number of trading days when investors can not trade stocks under the Stock Connect schemes is expected to be halved. For southbound trading, there will be nine additional trading days on average in a year and for northbound trading, there will be around five more trading days in year.
-- Contributable to enhancing efficiency of trading under Stock Connect
As of the end of June this year, A-shares held by northbound investors and H-shares held by southbound investors grew to 2.55 trillion yuan and 1.91 trillion yuan respectively but alongside the deepening of the connectivity mechanism, investors from the Chinese mainland and HKSAR have increasing demand for optimizing the trading days calendar of Stock Connect.
The above-mentioned CSRC official noted that optimizing the Stock Connect trading days calendar will gratify the reasonable need of investors to invest in equity assets on capital markets in the Chinese mainland and HKSAR, help further improve the trading connectivity mechanism between the two markets, and increase the appeal of both markets.
The move will also consolidate the status of Hong Kong as an international financial center and promote the long-term, stable and healthy development of the capital markets, according to the official.
Adjustments to the trading days calendar have been widely welcomed by market players.
Optimization of the trading days calendar is expected to further improve the efficiency of trading under the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect schemes and better protect the interests of investors in the Chinese mainland and Hong Kong, said an official with the Equity & Fixed-Income Investment Department of National Council for Social Security Fund (NCSSF) in China.
As the official introduced, the council has started investing via entrusted investment in the Hong Kong market under the Stock Connect schemes since 2018 and it has 10 portfolios of two product categories involved in related investment valuing more than 30 billion yuan at present.
NCSSF has been paying close attention to the progress of enhancements to the trading days calendar under the Stock Connect schemes and the move will further rationalize the institutional arrangement of Stock Connect and is conducive to related investment by the council, said the official.
Optimization of the trading days calendar will further guarantee the continuity of investors' transactions and help deepen the connectivity of the two capital markets, said analysts with China Asset Management Co., Ltd.
Overseas institutions also welcomed the adjustments to the trading days calendar. According to a staff of FTSE Russell, the enhancements will narrow the gap between the trading days of Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect and those of A shares and H-shares, and reduce trading risks in asymmetric trading days.
Within six months, CSRC and the Securities and Futures Commission of HKSAR will organize stock exchanges and settlement institutions to complete the preparations for implementing the trading days calendar adjustments for the Stock Connect, the CSRC official said. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
A single purchase
