Reasons to be optimistic about the Stock Connect

Author: Ashley Lee | Published: 9 Dec 2014

In the three weeks since the Stock Connect opened, there has been significant scrutiny on the lack of trading volume. But market participants believe critics should focus instead on the longer-term implications of the scheme.

Since its opening on November 17, low trading volumes on the Stock Connect have been criticised – particularly on the southbound link.

Many focused on statistics that showed only 1.8% of the daily southbound quota had been used, while 18% of the northbound quota was utilised.

But panelists at the IFLR Asia Capital Markets Forum last week agreed that that the opening of the Stock Connect seems to be going well on an operational level, which is crucial for maintaining confidence in the scheme.

"A new financial product is not a Ferrari," said Nick Ronalds, managing director of equities at the Asia Securities Industry and Financial Markets Association (Asifma). "It doesn’t...