From Staff Reports
Beijing's decision to allow individual mainland investors to trade directly in Hong Kong-listed shares could funnel tens of billions of dollars into the Hong Kong market over the next year and could help fuel an ongoing bull market in stocks, experts say.
Deutsche Bank AG (NYSE: DB) estimates the Monday policy shift, along with other recent initiatives designed to facilitate overseas fund flows, will channel $40 billion into Hong Kong-listed stocks before June. Prior to the rule change, Deutsche Bank had forecast $20 billion of mainland fund flows into Hong Kong during the 12-month period to June, MarketWatch reported this week.
"Technically it means all Chinese citizens now have a legal channel to invest in Hong Kong stocks," said Jun Ma, Deutsche Bank's chief economist for Greater China, wrote in a research note. China announced Monday that individual investors would be able to directly purchase Hong Kong securities under a new program it is launching. Better still, investments under that program will not be hamstrung by a rule that limited individuals buying or selling shares in foreign exchanges to a total of $50,000 annually.