How Shanghai - HK Stock Connect can improve

Author: Gemma Varriale | Published: 24 Nov 2014

After a slow first week, several key changes could improve the performance of the long-awaited Shanghai-Hong Kong Stock Connect.

Stock Connect comprises what is known as the northbound link, through which Hong Kong and overseas investors can buy and hold A shares listed on the Shanghai stock exchange, and the southbound link, through which investors in mainland China can buy and hold shares listed on the Hong Kong stock exchange.

Following its launch on November 17, the cross-border trading scheme filled 36% of its northbound quota and six percent of its southbound quota last week, according to Reorient Research. Concerns over potential initial glitches and China’s sluggish economy have been blamed for the tepid response.

"We are looking at two entirely different markets: there’s an onshore market, which...