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03-09-2018, 06:35 PM
China opens door to London stocks to reignite capital flight fears, sends Shanghai index down for fifth day
Zhang Shidong
PUBLISHED : Monday, 03 September, 2018, 1:04pm
UPDATED : Monday, 03 September, 2018, 5:27pm
China stocks fell for a fifth day on Monday, after the unveiling of draft rules for an exchange link with London fuelled concerns about fund outflows, offsetting resilient interim corporate results on the mainland.
The Shanghai Composite Index shed 0.2 per cent at the close, capping a five-day, 2.2 per cent losing streak. The gauge was about 2 per cent away from falling to a 30-month low set in August. Hong Kong’s Hang Seng Index slipped by 0.6 per cent.
“The market sentiment is very fragile and investors don’t like the news about the link,” said Wei Wei, a trader at Huaxi Securities in Shanghai. “They read the news as an extra way of fundraising, and that will weigh on the already tight liquidity situation.”
Traders looked past earnings results to focus on the draft rules released by the China Securities Regulatory Commission late on Friday, which laid out a framework for a long-awaited stock connect programme between the Shanghai and London exchanges. Companies trading on these two bourses will be able to float depositary receipts on the other exchange, although there will be restrictions on the conversion of surrogate securities and underlying stocks. The rules, which were published to seek public comment, did not say when the new link will start.
The regulatory body has already put on hold a plan that will allow China’s overseas listed companies to sell Chinese depositary receipts in the home market, over fears this could siphon away funds from existing equities.
The Shanghai Composite Index, the world’s worst-performing major benchmark, remains down by 18 per cent this year. It lost 4.52 points to 2,720.73 on Monday. The CSI 300 Index of big caps slid by 0.4 per cent, but the ChiNext gauge of smaller companies rebounded by 0.6 per cent.
More details in https://www.scmp.com/business/china-busi...i#comments
Zhang Shidong
PUBLISHED : Monday, 03 September, 2018, 1:04pm
UPDATED : Monday, 03 September, 2018, 5:27pm
China stocks fell for a fifth day on Monday, after the unveiling of draft rules for an exchange link with London fuelled concerns about fund outflows, offsetting resilient interim corporate results on the mainland.
The Shanghai Composite Index shed 0.2 per cent at the close, capping a five-day, 2.2 per cent losing streak. The gauge was about 2 per cent away from falling to a 30-month low set in August. Hong Kong’s Hang Seng Index slipped by 0.6 per cent.
“The market sentiment is very fragile and investors don’t like the news about the link,” said Wei Wei, a trader at Huaxi Securities in Shanghai. “They read the news as an extra way of fundraising, and that will weigh on the already tight liquidity situation.”
Traders looked past earnings results to focus on the draft rules released by the China Securities Regulatory Commission late on Friday, which laid out a framework for a long-awaited stock connect programme between the Shanghai and London exchanges. Companies trading on these two bourses will be able to float depositary receipts on the other exchange, although there will be restrictions on the conversion of surrogate securities and underlying stocks. The rules, which were published to seek public comment, did not say when the new link will start.
The regulatory body has already put on hold a plan that will allow China’s overseas listed companies to sell Chinese depositary receipts in the home market, over fears this could siphon away funds from existing equities.
The Shanghai Composite Index, the world’s worst-performing major benchmark, remains down by 18 per cent this year. It lost 4.52 points to 2,720.73 on Monday. The CSI 300 Index of big caps slid by 0.4 per cent, but the ChiNext gauge of smaller companies rebounded by 0.6 per cent.
More details in https://www.scmp.com/business/china-busi...i#comments
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