Stock investors in China and around the world will have easier access to hundreds of companies via the Shenzhen-Hong Kong link.
Institutional investors will be able to trade all dual-listed shares and most of the Shenzhen Component Index’s 500 members, as well as small- and mid-cap shares with a market value of more than 6 billion yuan ($904 million). Retail investors won’t have access to the ChiNext board of small firms at the beginning, according to the Securities and Futures Commission. The large number of small-caps in Shenzhen provides an additional opportunity for investors over the Shanghai-Hong Kong connect.
Global investors will gain access to some 870 Shenzhen-listed companies with a combined market value of about 7 trillion yuan via the northbound link, says Ting Gao, the Shanghai-based head of China strategy at UBS Group AG. Those firms include several high-growth technology and pharmaceutical companies in Shenzhen, which typically trade at higher valuations than Shanghai-listed firms. The ChiNext index trades at about 32 times its projected 12-month earnings, compared with a multiple of 13.4 for the Shanghai Composite and 11.9 for the Hang Seng Index.
Here’s what they get to trade: