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The 'Through Train' arrives

Market Commentary

10 November 2014

Following today’s announcement, the much talked about Shanghai-Hong Kong Stock Connect (‘Through Train’), is due to arrive next Monday, marking another step in the gradual opening of China’s vast financial system to foreign capital and global market forces. The scheme opens up a subset of China’s largely closed‘ A-share’ stock market to foreign investors through the Hong Kong stock exchange (SEHK), albeit with restrictions designed to keep the influence of foreign capital within limits acceptable to China’s policymakers. Ditto for mainland Chinese investors, who will now have access to SEHK-listed securities through the Shanghai Stock Exchange (SSE). Despite the restrictions, foreign investors should rightfully see this as an opportunity to gain exposure to the dynamic reform and development activity within mainland China.

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