A shares will be affected???

A shares will be affected???
Aug 28, 2007 02:16
KEVIN0518 Points: Join Date: Mar 13, 2007 Status: offline	Last Monday, the State Administration of Foreign Exchange announced that the individuals will be allowed to invest in Hong Kong stock market directly through the Bank of China. This will start in early September. Some experts estimate that this move will have negative impact on A shares. They are afraid that more funds in A shares will flow into Hong Kong stock market. In current situation, the impact is little. But it is hard to say in the future. Originally, this move aims at alleviating the excess liquidity and preventing A shares becoming overheated. What do you think of this move? A shares will feel the pinch? How about QDII (Qualified Domestic Institutional Investors)?

Aug 28, 2007 02:16

KEVIN0518
Points:
Join Date: Mar 13, 2007
Status: offline

Last Monday, the State Administration of Foreign Exchange announced that the individuals will be allowed to invest in Hong Kong stock market directly through the Bank of China. This will start in early September.

Some experts estimate that this move will have negative impact on A shares. They are afraid that more funds in A shares will flow into Hong Kong stock market. In current situation, the impact is little. But it is hard to say in the future. Originally, this move aims at alleviating the excess liquidity and preventing A shares becoming overheated.

What do you think of this move? A shares will feel the pinch? How about QDII (Qualified Domestic Institutional Investors)?

Aug 28, 2007 22:14

JOHNNY512
Points:
Join Date: Nov 29, 2004
Status: Offline

So far, A shares have not felt the pinch. These investors in mainland market are not familiar with Hong Kong stock market. Thus, they will not blindly transfer their money to Hong Kong market. In addition, the central bank has estimated that no more than 50 billion yuan will flow to Hong Kong market. This suggests that the central bank has fully considered the impact of this move on A shares.

To allow individuals to invest in Hong Kong stock market also has advantages. The price difference has always been existing between mainland market and Hong Kong stock market. This move can help to eliminate the price difference. Additionally, Hong Kong market also has been affected because the globle markets are all in its downturn. This move can help Hong Kong market to revive again.

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