Shanghai Stock Exchange Photo: CFP
The Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE) began adjusting the dissemination of market data for southbound trading and northbound trading under the Stock Connect regime from Monday, after the two mainland Chinese-based exchanges and the Hong Kong Exchanges and Clearing (HKEX) announced the plan in April.
The adjustments are part of a commitment to the sustainable development of the mutual market access program and are being implemented to maintain consistency across market disclosure. Experts say the adjustments will improve information disclosure, support market development and ensure fair access for all investors.
The northbound trading arrangements follow the standard practice of the mainland Chinese exchange. HKEX adjusted the real-time disclosure arrangements for trading information in May because real-time buy, sell and total turnover data were not available.
The real-time available daily quota balance is displayed when it falls below 30 percent; otherwise it is marked as “Available.” The three stock exchanges should display the total daily market turnover, the number of transactions, ETF turnover and the turnover of the ten most traded stocks.
As for southbound trading, both the SSE and SZSE are required to disclose the daily buy, sell and total turnover, the number of transactions, ETF turnover, and the buy, sell and total turnover of the top 10 most traded stocks. The real-time available daily quota balance will be displayed if it falls below 30 percent; otherwise, it will be marked as “Available.”
“The adjustments aim to provide fairer access to information for all investors and help reduce excessive market volatility and stabilize A-share investors’ expectations as the market was previously overly focused on northbound funds,” Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times on Monday.
In the long run, investors will rely more on corporate fundamentals, macroeconomic data and other market data in their investment decisions, which will further stabilize the domestic stock market, Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Monday.
Since its implementation, the Stock Connect system has become an important window for the mutual opening of China’s capital market, which has had a positive impact on the reform and stable development of the capital market in both mainland China and Hong Kong.
A series of optimization measures include the removal of the overall trading cap, the expansion of daily quotas for the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect services, and the improvement of trading calendars for the Shanghai and Shenzhen Stock Connect services.
Xi said the continuous improvement of Stock Connect reflects the country’s financial opening-up agenda, as one of the aspects of financial opening-up is manifested in the interaction of financial products between the Chinese mainland and Hong Kong.
Looking ahead, the three exchanges are expected to further optimize and improve the interconnection mechanism and support the high-level institutional opening of the capital market.
In addition to stocks, connectivity will also be expanded in other financial trading activities, said Xi, such as Bond Connect.
