Hong Kong Exchanges & Clearing (0388)

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Chinese regulators are disconnected from market, by enforcing the rule?

HKEx to reverse Shanghai link’s disappointing performance

HONG KONG (Jan 7): Hong Kong Exchanges & Clearing has found a way to help reverse the disappointing performance of the link between its stock market and the one in Shanghai.

The exchange operator will offer new trading accounts to fund managers as soon as March, enabling them to overcome the main obstacle stopping them from selling Shanghai-listed shares.

Chinese regulations compel international investors to deliver securities to their broker before 7:45am in Hong Kong on the day they plan to sell the shares on the mainland.

Many asset managers have compliance rules that prevent them from transferring equities before they have sold the securities.

The Hong Kong Investment Funds Association said its members were also concerned that brokers could leak the details of their sell orders.

Advance knowledge of an investor’s plans could give a rogue trader time to front-run an order, enabling them to profit from the subsequent price movement in the shares.

“Once this is implemented, it will go a long way to address the concerns of fund managers,” Bruno Lee, HKIFA's chairman, told reporters in Hong Kong.

The exchange link, known as Stock Connect, allows Hong Kong-based investors to buy a net 13 billion yuan (US$2.1 billion) a day of shares in the largest Shanghai-listed companies.

Daily purchases have fallen far short of the quota with the exception of Stock Connect’s opening day in November.

In total, asset managers have only bought about 25 percent of the Shanghai shares available to them since the link’s launch.
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http://www.theedgemarkets.com/sg/article...erformance
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RE: Hong Kong Exchanges & Clearing (0388) - by CityFarmer - 07-01-2015, 09:30 AM

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