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Hey, so what's the deal with HSI, Hang Seng? +3% yesterday & +4% @ 10pm EST
Hmmmm.....okay. I thought that linkage was complete last fall. Perhaps I didn't understand the whole package and time frames. Although Shanghai has been doing well; nothing like what is taking place in Hong Kong right now.
I haven't kept up as of late but I heard that Shanghai was in full bull mode. There might be more access to the markets now for the retail investors there.
Last Fall, China opened up their A-shares for purchase by regular Chinese folk, like you and me. During Q4 alone, 900,000 new brokerage accounts on the mainland were opened, and A-shares of China corporations were bid up like crazy. Perhaps HK shares came to be seen as the much better deal relative to the A-shares (which they certainly have been for several months). This wasn't the plan; new investors there may soon learn how it feels to be fleeced.
Instead of going to Macau, gambling on the mkt from home. It does kind of make a case for owning the HK exchange (which is a public stock and you can see how well that stock has done since the link was announced), but I wouldn't rush into the market more broadly. Long ICE in the US as a very long-term holding, but have considered other exchanges.
>>>"New action from regulators also appears to be spurring the resurgence in mainland buying.
The China Securities Regulatory Commission (CSRC) removed barriers for mainland money managers to buy H-shares last week. "The idea is not to hurt the A-share market, but to lower the valuation discrepancy between markets and spread risk," said Chris Weston, IG's chief market strategist.
Moreover, the China Insurance Regulatory Commission recently allowed mainland insurance firms to invest in Hong Kong's Growth Enterprise Market for the first time.
HSBC expects additional supporting policies to be announced in the near future, including the introduction of margin trading for mainland retail investors and a removal of the 500,000 renminbi minimum stock account balance, which should increase participation in southbound Stock Connect trading.
However, not everyone believes mainland players are at the center of the action.
"Despite the recent extension of Hong Kong-Shanghai Connect to include mainland fund managers, our discussions with brokers [on Wednesday] suggest it was foreign fund manager buying, rather than mainland Chinese," noted Mark Matthews, head of research Asia at Bank Julius Baer." <<<
Thank you to all who helped reason the original question.
Hong Kong Exchange ADR shares in the US - HKXCY. Offers a decent 1.6% yield. Look at the chart since the initial announcement of the linkage - low 20's a couple weeks ago, will open near $31 this am.
I was aware of the linkage changes from last fall and do follow China and related; but I was not aware of the recent changes noted in my above posting. Appears that some of the recent action is a "valuation" play between pricing of the mainland and HK markets.
If there is anything to glean from this, it is that the Chinese love to gamble and invest. They go all in when it involves the possibility of making more money. There are a lot of new Chinese middle class and up. This has spurred their real estate markets and the gambling houses for sure. Stocks are the latest thing.
• Overnight, the Chinese A/H share class trade continued to play out as the “Southbound” train was moving at full speed. With the China A-share premium over H-shares touching on 3 year highs in recent weeks, yesterday’s correction represented a 2.6x standard deviation move as the Heng Seng experiences record volumes. Note the FXI (tracking the H-Share FTSE China 50 index) jumped 6.2% yesterday - on quadruple its average volume - even as ASHR (tracking the CSI 300 China A-Shares Index) was only up 0.6%.
Mixing investing and gambling together is dangerous especially for inexperience investors. Will the Hang Seng index experience Alan Greenspan infamous phase "irrational exuberance"?
Yes. I have watching these various etfs including the ones you noted, as well as CN. These all have various mixes. Interesting to watch, eh? A lot of different actions, including now with some profit taking with some of these.
Comments
Hmmmm.....okay. I thought that linkage was complete last fall. Perhaps I didn't understand the whole package and time frames. Although Shanghai has been doing well; nothing like what is taking place in Hong Kong right now.
Here are a few related news stories.
Thanks, John.
Hong Kong is just skyrocketing at the moment.
Derf
It's a party on the Shanghai, and everyone is invited to the "self-feeding, leverage-fueled domestic frenzy"!
http://www.zerohedge.com/news/2015-03-27/dumb-money-30-new-equity-investors-china-have-elementary-education-or-less-bloomberg
Meanwhile, in Hong Kong tonight, it's still on like Donkey Kong--- to the moon, Alice!
http://www.zerohedge.com/news/2015-04-08/right-now-hong-kong
http://www.bloomberg.com/news/articles/2015-04-08/stock-mania-spreads-to-hong-kong-as-chinese-buyers-hunt-bargains
I never know what to do with these manias, but they sure are fascinating to watch.
additional short news report
Partial from this article:
>>>"New action from regulators also appears to be spurring the resurgence in mainland buying.
The China Securities Regulatory Commission (CSRC) removed barriers for mainland money managers to buy H-shares last week. "The idea is not to hurt the A-share market, but to lower the valuation discrepancy between markets and spread risk," said Chris Weston, IG's chief market strategist.
Moreover, the China Insurance Regulatory Commission recently allowed mainland insurance firms to invest in Hong Kong's Growth Enterprise Market for the first time.
HSBC expects additional supporting policies to be announced in the near future, including the introduction of margin trading for mainland retail investors and a removal of the 500,000 renminbi minimum stock account balance, which should increase participation in southbound Stock Connect trading.
However, not everyone believes mainland players are at the center of the action.
"Despite the recent extension of Hong Kong-Shanghai Connect to include mainland fund managers, our discussions with brokers [on Wednesday] suggest it was foreign fund manager buying, rather than mainland Chinese," noted Mark Matthews, head of research Asia at Bank Julius Baer." <<<
Thank you to all who helped reason the original question.
Catch
Hong Kong Exchange ADR shares in the US - HKXCY. Offers a decent 1.6% yield. Look at the chart since the initial announcement of the linkage - low 20's a couple weeks ago, will open near $31 this am.
I was aware of the linkage changes from last fall and do follow China and related; but I was not aware of the recent changes noted in my above posting. Appears that some of the recent action is a "valuation" play between pricing of the mainland and HK markets.
Thanks, scott.
Yes. I have watching these various etfs including the ones you noted, as well as CN. These all have various mixes.
Interesting to watch, eh? A lot of different actions, including now with some profit taking with some of these.
Thank you for your thoughts with all of this.
Catch
http://kraneshares.com/kba/
If you'd like to know about the Shanghai- Hong Kong Stock Connect, here's an overview:
http://kraneshares.com/the-through-train-is-coming-an-overview-of-the-shanghai-hong-kong-stock-connect/