New Investment Opportunities with Shanghai-Hong Kong Stock Connect

The commencement today of the Shanghai-Hong Kong Stock Connect represents a major step forward for China’s capital markets, allowing for the first time, cross border trading via the Hong Kong Exchange and Shanghai Exchange Mutual Market Access (MMA) link-up. As of today, foreign investors can invest in Shanghai Exchange stocks via the Hong Kong Exchange and Chinese investors can buy stocks listed in Hong Kong via the Shanghai Exchange.

Over the last week, the markets have seen equity rallies in both cities as the Stock Connect will give international fund managers unprecedented access to China’s $4.2 trillion stock market, and allow a combined $3.8 billion of daily cross-border trading.

The Shanghai-Hong Kong Stock Connect means more opportunities for Bloomberg’s institutional clients worldwide to invest directly in the world’s fastest growing economy via Hong Kong as a gateway. It signifies the next stage in the opening up of China’s capital markets and will accelerate RMB internationalization.

Over the past months, Bloomberg has worked closely with the exchanges, looked at the unique market specifications, built infrastructure, introduced customized technology solutions and new market data structures to ensure seamless workflow and execution for our clients participating in the Stock Connect program. The information and data we provide further enhances market transparency. It was important that from day one, the Bloomberg Professional service would be ready to support our clients in a trading workflow they were familiar with.

Through trade connectivity, market data, analytics and news about Stock Connect, Bloomberg is ensuring global investors can monitor the markets and make informed decisions based on fast and accurate information. Today, Bloomberg Professional service subscribers can participate in the Stock Connect and trade via our execution management system. Securities eligible for MMA will have the Exchange Codes H1 for Southbound and C1 for Northbound trading. We can capture trading data for pre and post-trade analytics for both the buy and sell side. Clients can also access China macro-economic updates, sector and company analysis, and undertake real-time monitoring of applicable stocks and investment flows.

The investment community is ready for the Stock Connect and so are we. Our work around the new trading link further extends Bloomberg’s role in engaging China with the world, leveraging our leadership in QFII and QDII order flows. Sound financial infrastructure will be critical to the future success of the Mutual Market Access program, and our support towards the further development of China’s capital markets continues. For more information, please go to MMA <GO>, the information hub for the Mutual Market Access program on the terminal.

Contributed by Taran Khera, Head of Hong Kong Sales, and Ee Chuan Ng, Head of China Sales, Bloomberg