The cross-boundary transactions through the capital market connectivity mechanism established between the Chinese mainland and the Hong Kong Special Administrative Region have reached roughly 177 trillion yuan (about 24.46 trillion U.S. dollars) over the past decade, according to the Hong Kong Exchanges and Clearing Limited (HKEX).
Since the launch of Shanghai-Hong Kong Stock Connect on Nov 17, 2014, and Shenzhen-Hong Kong Stock Connect on Dec 5, 2016, total turnover of Stock Connect has continued to hit new records, with strong participation from both Chinese mainland and international investors, facilitating the two-way flow of domestic and foreign capital and having a profound impact on the capital markets of the two regions.
The average daily turnover of northbound and southbound trading under the Stock Connect reached 136.3 billion yuan (about 18.83 billion U.S. dollars) and 43.9 billion Hong Kong dollars (about 5.64 billion U.S. dollars) respectively in the first 10 months of 2024, accounting for 7.3 percent and 17.2 percent of the total turnover of the mainland and Hong Kong markets, said the HKEX.
As of September 2024, the market capitalization of securities portfolios held in Hong Kong by mainland investors through the Stock Connect was over 3.3 trillion Hong Kong dollars (about 424 billion U.S. dollars), more than 200 times that at the end of 2014, said the HKEX.
"It's fair to say that the connectivity has opened a fast lane for international investors to invest in the mainland. What flows back and forth is not only products and funds, but also investors' recognition, understanding and attention to the markets of the two places," said Paul Chan Mo-po, Financial Secretary of Hong Kong.
Since the operation of Shanghai-Hong Kong Stock Connect, the cumulative turnover of foreign capital through the northbound trading has reached 70 trillion yuan (about 9.67 trillion U.S. dollars), and its average daily turnover has risen dramatically from 4.7 billion yuan (about 650 million U.S. dollars) in the first month of operation in 2014 to 128.3 billion yuan (about 17.73 billion U.S. dollars) now, according to the Shanghai Security Exchange.
So far, international investors from more than 130 countries or regions across the globe have participated in the northbound trading of Shenzhen-Hong Kong Stock Connect, with the average daily turnover marking 72 billion yuan (about 9.95 billion U.S. dollars) this year and seeing an average annual growth of 76 percent, according to the Shenzhen Security Exchange.
Moreover, southbound trading under Shenzhen Connect has seen its average daily turnover reaching 19.3 billion Hong Kong dollars (about 2.48 billion U.S. dollars) since the beginning of 2024, an average annual growth of 89 percent year on year.
"Currently, Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect have become main channels for international investors to trade and hold mainland's A-shares, with nearly 77 percent of foreign investors holding mainland stocks through these channels," said Bonnie Y Chan, the Chief Executive Officer of the HKEX.
As of September, more than 260 Hong Kong brokers had participated in the Shanghai and Shenzhen stock connect business, and more than 100 mainland securities companies had launched their HK Stock Connect businesses, according to the HKEX.
Stock connect between mainland, HK facilitates increasing two-way flow of capital in past decade
