Following several months of work, we have been awarded HK Connect status which allows us to invest in Shenzhen and Shanghai listed ‘A’ shares (formerly known as local stock).
The ‘stock connect’ link between China’s mainland markets and Hong Kong relaxes restrictions that historically split the Chinese stock market between shares targeted at local investors and those available to international investors. The link was first launched in 2014 between Shanghai and Hong Kong. In late 2016 it was further extended to include the burgeoning, technology hub of Shenzhen. It allows mainland Chinese to purchase shares listed in Hong Kong and lets foreigners buy China A shares listed on the mainland.
This vastly expands the range of possible investments we can make in the world’s most exciting economy.
Fay Ren, Co-Manager of TM Cerno Pacific & Emerging comments: “The A-share market is more than twice the size of the H-share market, giving us access to a wealth of new ideas to explore. There are some real gems in the mix and we are thrilled with the opportunity to find and own them, in particular the more tech oriented entrepreneurial names that are little known outside the country”.
Goldman Sachs, with whom we have worked on this, advises we are the first UK-only investment manager that they have permissioned to trade in this way.