Caixin
Jan 14, 2019 05:16 AM
FINANCE

In Depth: China’s Tale of Two Markets

The HKEx initiated its most significant reform in 25 years to revise listing rules in 2018. Photo: VCG
The HKEx initiated its most significant reform in 25 years to revise listing rules in 2018. Photo: VCG

(Hong Kong) — Twenty-one years after Hong Kong’s return to China, the stock market of the former British colony has developed an intricate, symbiotic relationship with its mainland counterparts — they are increasingly interconnected while competing with each other.

The ties between the Hong Kong and mainland markets have become ever closer as more mainland companies seek listings in Hong Kong and as stock-connect programs enable investors to trade on all of China’s bourses. According to data released last week by the Hong Kong exchange, more than 50% of listed companies, 70% of total market cap, 80% of average daily transactions and 95% of initial public offerings (IPOs) in Hong Kong are linked to the mainland.

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