Based on the closing stock prices on August 16, foreign investors will have access to more than 860 stocks in Shenzhen, compared with about 570 in Shanghai through the existing link. Materials companies are the exception, as they’re trading higher as the dollar weakens.
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LOOKING AHEAD: Investors will later in the day keep an eye on a run of USA data that will include inflation, industrial production and housing starts for July. “Without the platform, the door would be pretty much shut for retail investors, who could only invest through funds and unit trusts with RQFII”, CMC Markets analyst Margaret Yang said, referring to a government scheme that licenses institutions to invest in mainland shares within a given quota. Additionally, the Hang Seng China AH Premium Index has dropped by 20 percentage points to 125, from its peak of 145 at the beginning of the year.
The CSI300 index, which tracks the largest listed companies trading in Shanghai and Shenzhen, fell 0.2 percent to 3,373.05, while the benchmark Shanghai Composite Index was flat at 3,110.23. Benchmarks in New Zealand and Malaysia advanced while Taiwan and Singapore declined.
NEW YORK (AP) – U.S. stocks are slipping Tuesday as investors continue to sell phone company and utility stocks. Stocks have wavered lately as investors review mixed reports about the USA economy, trying to get a sense of its health.
KEEPING SCORE: The Dow Jones industrial average lost 38 points, or 0.2 percent, to 18,598 as of 10:26 a.m. The Shenzhen Component Index added just 0.07 percent while the ChiNext rose 0.32 percent.
China home prices rose 0.8 percent in July nationwide, but stalled or fell in more cities than in June.
The long-planned stock-trading link between Hong Kong and the mainland city of Shenzhen has been approved, a step toward opening China’s US$6.5 trillion equity market to global investors.
While daily trading quotas for participants buying Shanghai and Shenzhen shares in the scheme are capped at 13 billion yuan ($1.96 billion) for each market, Hong Kong and China have agreed to scrap an aggregate quota, meaning investors could have unlimited access to Chinese shares over time. “Hong Kong is still too small for the opening Chinese market, which will ultimately be connected to the whole world”, Lin said. It helped to boost sentiment there on Wednesday, but analysts said the influx of foreign money into Chinese stocks is likely to be modest.
China announced plans to open its Shenzhen stock market for foreign investors, but it wasn’t clear the new “through train” would see any more traffic than the lackluster Shanghai one.
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Mainland Chinese shares have fallen around 12% so far this year while Hong Kong is flat. One member of the policy-making board, William Dudley, said earlier that it was premature to rule out further increases this year and another member, Dennis Lockhart, has said there could be two hikes in 2016. Early this year it looked like the dollar would stay at those elevated levels because the Federal Reserve was raising interest rates while other global central banks were cutting them to stimulate their economies. The euro rose to $1.1275 from $1.1183.
