• Friday, October 18, 2019

Shanghai-Hong Kong Stock Connect program

Discussion in 'China & Far East' started by TaiShang, Sep 28, 2014.

  1. TaiShang

    TaiShang ELITE MEMBER

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    SSE launches latest test for stock connect program
    By Chen Yang

    Overseas investors may be exempted from capital gains tax
    d8a2d5f022df861e7fd696e3fef7074d.jpeg
    An investment forum on Shanghai-Hong Kong Stock Connect program is held in Shanghai on August 9. Photo: CFP

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    Stock Connect program


    The Shanghai Stock Exchange (SSE) on Saturday launched the latest test for the stock trading program linking Shanghai and Hong Kong bourses, which for the first time specifies tax rules, a media report said.

    Issues such as taxes and fees will be included in the third round of the market function test for the Shanghai-Hong Kong Stock Connect program that allows mutual trading for investors, the 21st Century Business Herald reported Friday.

    "International investors are highly concerned about whether authorities will levy capital gains tax when they invest in A shares via the program, and a clarification will facilitate the launch of the program," Song Qinghui, an independent economist and consultant with China Securities Regulatory Commission's Shenzhen branch, told the Global Times Saturday.

    According to the report, a 10 percent capital gains tax and a 5-20 percent dividend tax will not be included in the test, and only a smaller stamp duty will be tested.

    "It is possible that the capital gains tax will be exempted as an incentive for overseas investors at the primary stage of the program," Song said.

    The SSE has not released details of the latest test and was unavailable for comment on Saturday. It said Friday that most mainland securities firms have qualified to join the program.

    Around 90 securities firms, accounting for 98 percent of the program's market volume, had completed inspection as of Thursday, and most of them have met requirements to start the program, the SSE told an online press conference via Weibo on Friday.

    Nearly 300 institutions such as pension operators, hedge funds and investment banks in North America, Europe and Middle East have participated in SSE's roadshows on the program.

    International investors expect the rollout of the program as soon as possible, and some have already set up teams with Chinese background to invest in the mainland's A-share market under the program, the SSE said.

    But the exchange did not disclose the exact date the scheme would be officially kicked off. Reuters reported Friday that it will be launched on October 27, citing unnamed sources.

    The SSE on Friday also released the final version of detailed rules for the stock trading program, among which permission for margin trading and short selling are the highlights.

    Overseas investors have been allowed to conduct margin trading and short selling of A shares in the SSE. However, detailed rules on margin trading and short selling for mainland investors on the Hong Kong stock exchange will be announced later.

    The rules have fully taken into consideration all factors related to the market and international investors, as well as cross-border risks, the SSE said.

    "Allowing margin trading and short selling will increase the program's attraction to investors from Hong Kong and abroad," Dong Dengxin, director of the Financial Securities Institute at the Wuhan University of Science and Technology, told the Global Times on Saturday.

    "As the SSE has set regulations on such trading activities, they are not likely to cause fluctuations in the mainland stock market," he said.

    The detailed rules also specify measures to deal with abnormal trading, including suspending trading of related shares or temporarily halting trading on an entire exchange.

    "When there are cross-border violations, the two exchanges will use a cooperative supervision mechanism," the SSE said.

    Analysts have expressed concerns that the cross-border stock trading program will lead to arbitrage.

    Among dual-listed firms, many banking and energy A shares are traded at discounts of more than 10 percent compared to their H shares, while A shares have premiums larger than 30 percent for many industrial and materials firms. Arbitrage opportunities will be more readily explored after the link-up, Tim Craighead, an analyst with Bloomberg Intelligence, said in a research note on Tuesday.

    "The arbitrage behavior [in the program] can not be avoided, but we think the room for arbitrage will be very limited," Guo Song, an official with the State Administration of Foreign Exchange, told a press conference on Thursday.
     
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  2. Kolaps

    Kolaps FULL MEMBER

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    Westerners are owning and controlling Chinese companies.

    Like ALIBABA.

    We, all Chinese people are very happy and proud!
     
  3. Sonyuke_Songpaisan

    Sonyuke_Songpaisan FULL MEMBER

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    yeah, we are proud just like our brothers and sisters in taiwan want to be westners' b1tches, especially to USA and Nihon
     
  4. cirr

    cirr ELITE MEMBER

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    Alibaba is under the control of Ma Yun and his club members。:D

    Ma Yun and his buddies don't even need to have a double share structure to have firm control of the company。:enjoy:
     
  5. Kolaps

    Kolaps FULL MEMBER

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    You are a victim of censorship.

    A country without freedom.
     
  6. Beidou2020

    Beidou2020 SENIOR MEMBER

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    You are funny.
     
  7. Kolaps

    Kolaps FULL MEMBER

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    I want to ask a question.

    China open a stock market... Who is buying the share?

    Chinese investor? or Whites investor?
     
  8. TaiShang

    TaiShang ELITE MEMBER

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    Shenzhen-Hong Kong stock connect turnover exceeds 4 trln yuan over 2 yrs

    (Xinhua) 16:00, December 06, 2018

    BEIJING, Dec. 6 (Xinhua) -- Two years after its launch, the Shenzhen-Hong Kong stock connect program has become an important platform for global investors to access China's A-share market.

    As of Dec. 5, the program's two-year anniversary, the total turnover through the stock connect reached 4.15 trillion yuan (about 605 billion U.S. dollars), data from the Shenzhen Stock Exchange showed.

    Net purchases through northbound trading, or money invested from Hong Kong into the Chinese mainland, reached 266.84 billion yuan, while net purchases through southbound trading totaled 156.54 billion yuan, resulting in net capital inflows into the Chinese mainland of 110.3 billion yuan, the data showed.

    Northbound trading has been particularly active since global index provider MSCI included some Chinese A-shares in its widely tracked indices on May 31.

    Global investors have been increasingly bullish on stocks listed in Shenzhen, particularly small-cap growth stocks, the data showed.

    China has been stepping up efforts opening its financial sector wider to the world, with stock and bond connect programs allowing global investors to access its growing capital market.
     
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