Shenzhen’s market is home to most of the mainland’s high-tech and internet companies which tend to have high growth potential and subsequently great appeal to many fund managers.
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“In the past year or so, while the stock and foreign exchange markets in Hong Kong and mainland experienced heightened volatilities at times, currency conversion, settlement and liquidity arrangements arising from the Stock Connect scheme have been functioning well”, Hong Kong Monetary Authority Norman Chan said in a statement. Hong Kong’s Hang Seng index was down 0.1 percent at 22,910.84 while Australia’s S&P/ASX 200 dipped 0.1 percent to 5,532.00.
The Shenzhen Composite Index is down 12 percent this year.
In Singapore, key non-oil domestic exports fell more than expected in July, due to a decline in both electronics and non-electronics shipments.
In company news, Australian health and safety protection solutions provider Ansell reported its full year 2016 earnings, posting sales revenue of $1.572 billion USA, which was down 4% from a year earlier.
USA stocks are slipping Tuesday as investors continue to sell phone company and utility stocks. On Tuesday the Federal Reserve said US factories cranked out more autos, machinery and chemicals in July, which suggests manufacturers might be recovering, though growth remains little changed from a year ago and manufacturers aren’t adding many jobs.
The Dow Jones industrial average lost 38 points, or 0.2 percent, to 18,598 as of 10:26 a.m. The Shanghai Composite gained 2.4% in late afternoon trade Monday, while the small-cap focused ChiNext Composite Index rose 3.3%.
The Chinese premier signalled today the long-awaited Shenzhen-Hong Kong Stock Connect had been given the green light by the country’s state council, meaning worldwide investors will be able to buy shares on companies listed in Shenzhen.
The State Council has given the green light to a long-awaited plan to connect a second mainland stock exchange with Hong Kong’s, further opening China’s capital market.
Parent Dalian Wanda Group, owned by China’s richest man, Wang Jianlin, offered HK$52.8 a share to buy out the Hong Kong-listed property unit, aiming to take it private before relisting it in China where it hopes for a higher valuation.
Still, the development won’t likely push up stocks sharply, said William Cheung, an analyst for regional strategy at Kim Eng Securities.
Until the launch of the Shanghai-Hong Kong link, only a few foreign institutions were allowed to buy mainland-traded shares in a closely regulated system.
DOLLAR DEALS: The dollar fell to 100.25 yen from 101.25 yen.
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OIL: Benchmark U.S. crude added 67 cents, or 1.5 percent, to $46.41 per barrel in NY. The contract rose 84 cents on Tuesday to $46.58. Oil prices have abruptly reversed course after losses in June and July, and crude is on a four-day winning streak.
