China's central bank has given the nod on the QDII2 scheme to allow wealthy individuals to allocate overseas, and is further liberalising offshore investment via the Shanghai free trade zone.
Tag : qdii2
Investors must be quick to sell H-shares and buy A-shares via the Shanghai-Hong Kong trading link to avoid losing the premium on HK-listed stocks, says the equity broker.
Pre-trade checks and stock transfer restrictions are cited as particular problems for long-only managers who will look to trade A-shares via the Hong Kong-Shanghai stocks link.
CSOP Asset Management's head trader expects the planned Shanghai-Hong Kong trading link to attract greater volumes to the Shanghai Stock Exchange and reduce issues over liquidity.
Interest in the A-share/H-share spread trade is tipped to rise come October, when the Shanghai-Hong Kong Stock Connect goes live, but profitability of the transaction may fall as a result.
Authorities release draft regulations for the pending scheme to link the two bourses, although updates on taxation and how trades can be placed are still to be announced.