The Story of Stock Connect & China Equity Investing

Stock Connect began in November 2014, what does it mean for China A-share investing and onshore and offshore China stock exchanges?

15 Oct 2019
  • Stock Connect has changed China equity investing for the better.
  • It started on November 17th, 2014 with the Hong Kong Shanghai Stock Connect.
  • Stock Connect linked international investors with the Shanghai Stock Exchange via Hong Kong as well as allowing Shanghai investors to allocate to stocks on the Hong Kong Stock Exchange.
  • Stock Connect was extended to link the Hong Kong Stock Exchange and Shenzhen Stock Exchange on December 5th 2016.
  • To date, the program has brought more than USD 110bn of overseas capital into China's A-share markets, according to Bloomberg data.
  • Also, the improved access from Stock Connect was a key reason why China A-shares were included in the MSCI equity benchmarks from June 2018.
  • Many years ago, China stocks were divided between onshore stocks, i.e. listed in mainland China, and offshore stocks, i.e. listed in Hong Kong or US markets.
  • Now, we believe the success of Stock Connect means the distinction between onshore and offshore China equities has disappeared.
  • Instead, we believe that investors should look at China equities from an All China perspective, i.e. investing according to wherever the best opportunities are, not because of where they are located.
  • And we believe that's why Stock Connect has changed China equity investing for the better.

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