Stock connects fueling capital flows via mainland, HK bourses

Bourses in Shanghai, Shenzhen and Hong Kong have been able to forge strong ties through the various stock connect programs, with higher capital inflows and renewed market vitality being the key takeaways, experts said.

The Shanghai-Hong Kong stock connect, the first such mechanism of its kind, celebrated its fifth anniversary on Sunday. The Shenzhen-Hong Kong stock connect program was opened in 2016. As of Nov 15, overseas investors held more than 882.8 billion yuan ($125.9 billion) worth of Chinese mainland shares via the stock connect program between Shanghai, Shenzhen and Hong Kong, according to Shanghai-based market tracker Wind Info. That number accounted for 1.45 percent of the total Chinese stock market value, up from the 0.16 percent registered five years ago.

Northbound investment, or the total trading volume made by overseas investors via the stock connect programs in the Chinese mainland market, topped over 8.47 trillion yuan by Nov 15, taking up 7.58 percent of the total market trading volume, according to Wind Info. That ratio was only 0.23 percent in 2014.