The upcoming Shenzhen-Hong Kong Stock Connect program will significantly broaden the range of Hong Kong Stock Exchange listings available for convenient purchase through mainland Chinese brokerage accounts. Background:
- HKEX: Frequently Asked Questions
- Expected launch in the second half of November following testing
- HK securities eligible purchase will include all constituents of the Hang Seng Mid-Cap Index and all constituents of the Hang Seng Small Cap index with average daily market cap over HK$5Bn in the prior 12 months (link to index constituents)
Chinese property developers listed in Hong Kong are likely to see significant demand:
- High visibility – Residential property development has a high public profile in China. Investors are familiar with the industry and individual companies.
- Low valuation of Hong Kong listings relative to companies trading in Shanghai/Shenzhen at an average P/E over 15, P/B over 1.8, and yield about 2.2%