HK-Shanghai stock gaps to disappear

[SHANGHAI] THE days of paying different prices for the same stock in Hong Kong and Shanghai are numbered, according to Morgan Stanley.

Valuation gaps between dual-listed shares will disappear as an exchange link between the two cities leads to the creation of a "one-China" market, Jonathan Garner, the head of Asia and emerging-market strategy at Morgan Stanley, said in a Bloomberg Television interview in Hong Kong yesterday. Yuan-denominated A shares on the mainland are valued at a discount of about 7 per cent versus Hong Kong counterparts, known as H shares, according to the Hang Seng China AH Premium Index.

"We're looking for A-H stock price convergence," Mr Garner said. Over time, the gaps "will effectively come down to zero", he said.