Foreigners snap up Shanghai stocks after rate cut

[HONG KONG] Foreign buyers quickly snapped up nearly a fifth of their daily 13 billion yuan (US$2.12 billion) quota of Shanghai stocks on Monday in the first hour of trade as demand for mainland shares rebounded after China cut unexpectedly interest rates on Friday.

The revival in demand for mainland shares is a striking contrast to the flagging demand last week with a similar quantum of quota utilisation taking a full day on Friday to get filled.

The Stock Connect scheme, which allows Hong Kong and Shanghai investors to buy and sell shares on each other's bourses, is the latest step towards opening China's tightly controlled capital markets debuted last week but quota utilisations have faltered after Monday's debut due to rich valuations and unclear rules.

REUTERS