On July 4, the exchange-traded funds (Exchange Traded Funds, hereinafter referred to as "ETFs") under the Mainland and Hong Kong Stock Market Interconnection Mechanism (hereinafter referred to as "Interconnection") officially opened for trading, which has also become the capital market. Another landmark event.
Wind statistics show that as of July 4 this year, since the opening of Shanghai-Shenzhen-Hong Kong Stock Connect, the cumulative net purchase amount of northbound funds has exceeded 1.7 trillion yuan, and the cumulative net purchase amount of southbound funds has exceeded 2 trillion yuan.Market participants said that the official inclusion of ETF products as the subject of the interconnection is another major measure to deepen cooperation between the capital markets of the two places since the opening of the interconnection and to further implement a high-level opening to the outside world.The ETF interconnection target will add new investment targets for northbound funds and southbound funds, and will further introduce long-term allocation funds into the two markets, which also means that the internationalization of the A-share market is further progress.
The first batch of 87 ETFs to start trading new trading tools to expand
According to the announcement of the exchange, the first batch of ETFs officially included in the Shanghai-Shenzhen-Hong Kong Stock Connect reached 87.Among them, there are 53 ETFs for Shanghai Stock Connect, 30 ETFs for Shenzhen Stock Connect, and 4 ETFs for Hong Kong Stock Connect.Mainland investors can buy 4 Hong Kong stock ETFs through southbound Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, while international investors can buy 83 A-share ETFs through northbound Shanghai-Shenzhen Stock Connect.
"The northbound 'ETF Connect' covers many products and types, including not only core broad-based products such as ChiNext ETF and CSI 300 ETF, but also representative industry themes such as chip ETF, carbon neutral ETF, and 5GETF. The products are mainly concentrated in the fields of advanced manufacturing, digital economy and green and low carbon. Since the relevant investment products and sectors are relatively scarce in the Hong Kong stock market, they have strong allocation attractiveness for international investors, helping them to achieve more convenient Invest in the mainland market." Xuan Wei, chief strategist at China Asset Management, said in an interview with the Economic Information Daily that the ETFs that invest in A-shares in Hong Kong's local market are still concentrated in major broad-based indices. In recent years, the mainland stock ETF market has continued to Digging deeper into subdivisions, industry-themed ETFs are emerging rapidly, accounting for half of the entire market, such as securities, banking and other industry ETFs, as well as 5G, chips, consumption, new energy vehicles and other popular themed ETFs, and some featured products for overseas investment have stronger configuration attractiveness.
Ming Fang, China Director of UBS Global Financial Markets Department, also emphasized that for overseas investors, both investment and trading, more ETF targets will improve the efficiency of investment decision-making and enrich trading strategies in the Chinese market, especially those involving Some unique themes and scarce industry types in the mainland stock market.For mainland investors, ETFs can optimize investment portfolios and provide access and convenience for their global allocation.
20 public funds are the first to benefit from incremental funds and are expected to accelerate their entry into the market
"Under the background that interconnection has become the main way for foreign capital to allocate A shares, after further enriching the varieties that foreign investors can invest in and improving their investment convenience, the ETF market is expected to usher in incremental funds. With the opportunity of this expansion, it is expected to help the mainland real economy. Injecting more capital also provides more opportunities for international capital and financial institutions to invest in the Chinese market." said Dong Dengxin, director of the Institute of Finance and Securities at Wuhan University of Science and Technology.
Southern Asset Management stated that Wind data shows that among the stock ETFs listed on the Hong Kong Stock Exchange, the total size of funds invested in A-shares has exceeded 50 billion yuan, reflecting the investment demand of A-share ETFs in overseas markets. Equity ETFs introduce diversified incremental funds.On the first day of trading on July 4, Ma Zhiping, head of the Greater China stock business of Goldman Sachs Global Markets Department, introduced that the institutional trading team has completed multiple ETF transactions under the interconnection mechanism.As a financial institution that can support overseas institutions to invest under the QFII and all interconnection mechanisms, Goldman Sachs expects that more foreign capital will flow into China's financial market through the ETF interconnection mechanism in the future.
It is worth noting that the first batch of 83 northbound eligible ETF products involves 20 public funds with a total scale of more than 671.7 billion yuan.Among them, GF, Huaxia, Cathay Pacific, and E Fund are the top ones, with 12, 10, 8 and 7 respectively.
The internationalization of the capital market goes one step further
With the deepening of the opening-up strategy, ETFs will become an important carrier for the opening-up of the capital market, and the ETF interconnection mechanism will be further expanded, which will help continue to promote the internationalization of China's capital market.
Cai Jianchun, general manager of the Shanghai Stock Exchange, said that in recent years, the turnover of Shanghai-Hong Kong Stock Connect has gradually increased, with a cumulative turnover of 52 trillion yuan.In the next step, the Shanghai Stock Exchange will further strengthen exchanges and cooperation with the Shenzhen and Hong Kong exchanges, settlement companies in the two places and market participants, continue to optimize mechanisms such as interconnection, actively create a market environment conducive to the entry of medium and long-term funds, and promote cooperation with the Hong Kong market. Deep cooperation and coordinated development.
Sha Yan, general manager of the Shenzhen Stock Exchange, pointed out that the inclusion of ETFs as the subject of interconnection is conducive to enriching cross-border investment varieties, providing more investment convenience and opportunities for domestic and foreign investors, and promoting the sustainable, stable and healthy development of the two markets. The strategic deployment and important measures to support the Hong Kong market in consolidating and enhancing its status as an international financial center are also another landmark achievement of deepening the interconnection mechanism.
"Since the implementation of the QFII (Qualified Foreign Institutional Investor) system in 2002 and the implementation of the RQFII (Renminbi Qualified Foreign Institutional Investor) system in 2011, China's capital market has continued to open up to the outside world. The degree of openness has been further deepened," said Chen Li, chief economist of Chuancai Securities.
(Editor in charge: Guan Jing)
