Shenzhen was China's third city to host a wholly foreign-owned investment management company, following Shanghai and Tianjin. It could appeal to smaller or tech-savvy asset managers.
The launch of Shenzhen Connect will not spark big flows into Chinese stocks given current price levels and concerns about mainland market access, says the French bank.
The long-awaited trading link received approval yesterday and is set for launch in December with no aggregate volume limit and exchange-traded funds to be included next year.
iShares will launch its new MSCI-linked A-share exchange-traded fund at a time of negative sentiment on Chinese equities and into an already crowded space.
Shenzhen is believed to have handed out licences – but only $1 billion in extra quota – to another 30 fund houses under its QDIE cross-border alternative investment scheme.
Fund managers debate concerns that Hong Kong’s stock market is beholden to the immaturities of trading in mainland China.