The Shanghai-Hong Kong Stock Connect pilot program, announced in April, marks an important step in China’s financial market reform. It also provides Chinese and overseas investors opportunities for investment and trading.
As always, the Chinese government capped the program with strict quotas to avoid major market disruptions. The total aggregate trading value allowed initially for the Mainland is RMB300 billion, compared with RMB14.3 trillion total market capitalization for the Shanghai Stock Exchange 180 Index.
The quotas are expected to be expanded gradually. The pilot program will no doubt mark the beginning of a much more connected and integrated marketplace between the Mainland and Hong Kong.
Here, we chart everything investors need to know about the pilot program. Special thanks to Skybound Capital for providing data on the stock indexes.