Stock Connect tipped to impact H-share spread trade
Interest in the A-share/H-share spread trade is tipped to rise come October, when the Shanghai-Hong Kong Stock Connect goes live, but profitability of the transaction may fall as a result.
China A-share/H-share spread trade volumes are set to rise when the Hong Kong-Shanghai Stock Connect goes live, meaning price disparity will narrow and profits from such transactions may be squeezed, say observers.
The spread trade had been impeded because brokers have been running out of qualified foreign institutional investor (QFII) quota, but the proposed Connect scheme has stoked interest, as it will link the HK and Shanghai bourses’ clearing houses and allow people to invest…
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