China’s Second Stock Link Is Changing How People Buy Its Shares
- Link investors attracted by lower costs, fewer restrictions
- QFII now more likely to be used for bonds, futures, funds
The Shenzhen stock exchange.
Photographer: Qilai Shen/BloombergThis article is for subscribers only.
China’s second stock exchange link with Hong Kong is accelerating a change in how overseas investors access the world’s second-largest equity market.
Foreigners are selling the Chinese shares they hold under the Qualified Foreign Institutional Investor program and buying them back using the new Shenzhen-Hong Kong Stock Connect, according to market participants. The shift may partly explain why some mainland equities have seen heavy purchases through the link even as their prices dropped. Among the 10 Shenzhen-listed stocks bought most through the connect on its Dec. 5 debut, just two rose on the day.