Shenzhen steals a march on Shanghai market

JUST as Shanghai was starting to enjoy the title of favourite destination for Chinese stock investors, the nation's smaller bourse in Shenzhen is stealing it back.

The Shenzhen Composite Index of companies traded in the Southern Chinese city has climbed 6.2 per cent during the past month, beating the Shanghai Composite Index by 13 percentage points in the biggest outperformance since 2008. The Shanghai gauge had led gains last quarter for the first time in two years as the city opened up to international investors through its exchange link with Hong Kong.

Shenzhen shares from Han's Laser Technology Industry Group Co to Wanda Cinema Line Co are regaining the lead after the bourse said it will replicate its northern counterpart's link, which allows foreigners to buy as much as 300 billion yuan (S$64.6 billion) of mainland shares. The smaller exchange's higher concentration of stocks that benefit from government efforts to boost the technology and consumer industries give Shenzhen an edge as it opens up, according to Spring Capital Ltd.