HK-Shanghai market through train on track for Oct launch

THE People's Republic of China is preparing to take a major step towards the creation of a "One China" (ie, one-price) equity market. Announced in April, the so-called through- train of Hong Kong/Shanghai mutual stock market access (MMA) appears to be on track for a mid-October launch, and it could add fuel to a continuation of the bull market in stocks traded in Hong Kong (H-shares).

While the H-share rally continues to derive support from a pick-up in China's business cycle and implementation of Third Plenary reforms, MMA would also raise the probability that stocks traded on China's mainland exchanges (A-shares) could emerge from their four-year bear market.

Although the launch itself only includes select Shanghai Stock Exchange (SSE) issues and none traded on the Shenzhen Stock Exchange, there is high broker interest in the programme, particularly on the mainland, according to China Securities Regulatory Commission (CSRC) data.