ETF includes interconnected A shares to welcome more foreign capital inflow

On June 24, the CSRC issued the "Announcement on the Integrated Arrangement of Transaction Open Fund Integrated Fund" (hereinafter referred to as the "Announcement"), further deepening the interconnection mechanism of the mainland and the Hong Kong stock market in China, and promoting the common capital markets of the two places. develop. The "Announcement" is implemented from the date of release. Regulations of the Shanghai and Shenzhen Exchange and China Settlement Release.

Chen Li, chief economist of Chuancai Securities and director of the Institute of Research, said in an interview with the Securities Daily that the incorporation of ETF into the interconnection will inject vitality into the markets of the two places. For Hong Kong stocks, the overall P / E ratio of the Hang Seng Index is about 9.9 times, and it is at a historical low. After the Hong Kong Stock Connect ETF is included in the interconnection, it is expected to strengthen some of the Hong Kong stocks that are underestimated. For A shares, ETFs are included in interconnection, which reduces foreign investment and has reduced foreign investment. The threshold is expected to attract more foreign capital to the A -share market.

Improve the Shanghai -Shenzhen -Hong Kong Connect Ecology

On May 27, the China Securities Regulatory Commission and the Hong Kong Securities Regulatory Commission issued a joint announcement that they agreed to the exchanges of the two places to incorporate the qualified ETFs into interconnection. On the same day, the CSRC solicited opinions on the society publicly.

There are 5 "Announcement", one is to clarify the expansion of the interconnection and interoperability mechanism of the mainland and the Hong Kong stock market to the transaction -type open -end fund, the other is to clarify the relevant institutional arrangement of reference to the stock interconnection of the stock, the third is to clarify the investor identification code arrangement, the fourth is to clarify Related requirements for securities companies and public fund managers, and fifth is to clarify related arrangements for business implementation.

Dong Dengxin, director of the Institute of Finance and Securities of Wuhan University of Science and Technology, told the Securities Daily that ETF was included in interconnection and enriched the Shanghai -Shenzhen -Hong Kong -General market investment portfolio. It can increase overseas capital to participate in the A -share market investment opportunities and attract foreign investment. ETF transaction costs are low, and risks can be dispersed. After interconnection, overseas capital entering A -share will further increase.

Gui Haoming, the chief market expert of Shen Wanhongyuan, told a reporter from the Securities Daily that ETF is included in interconnection, which facilitates investment in domestic and foreign investors. A shares will also attract more foreign capital inflows. Overseas capital often does not know much about local enterprises. ETF investment can reduce investment difficulties to a certain extent. At the same time, it can also improve the Shanghai -Shenzhen -Hong Kong -connected ecology and enrich investment varieties.

"Implementation Measures" mainly revised two aspects

On June 24, the Shanghai and Shenzhen Exchange released the "Implementation Measures for the Shanghai Stock Exchange Shanghai -Hong Kong Stock Connect Business (Revised 2022)" and "Shenzhen Stock Exchange Shenzhen -Hong Kong Stock Connect Business Implementation Measures (Amendment of 2022)" (collectively referred to as "Implementation Measures for Implementation Measures ")," Shanghai Stock Exchange Hong Kong Stock Connect Trading Risk Revelation (Revised in 2022) "," Shenzhen Stock Exchange Hong Kong Stock Connect Trading Risk Revision (Amendment of 2022) " Preparation clauses) and necessary clauses for entrusted agreements on Hong Kong Stocks. In addition, China Settlement and Hong Kong's "Detailed Rules for the Implementation of the Mainland and Hong Kong Stock Market Transaction Interconnection Mechanism, Storage Management, and Settlement Business (Revised Edition in June 2022)" regulates the registration and settlement business of the interconnection and interoperability.

Specifically, the main amendments to the "Implementation Measures" include two aspects. One is to clarify the specific arrangements of ETF incorporation into the interconnection standard. The Shanghai -Shenzhen Exchange and Stock Exchange shares ETFs that meet the conditions are included in the scope of the Shanghai -Hong Kong Standard. The stocks of the stock bid are mainly; the average asset size of the Stock Exchange ETF has reached HK $ 1.7 billion in the past six months, and its component securities are mainly based on the Hong Kong Stock Standard stocks.

In addition, ETFs that include the target must meet the requirements of 6 months of listing and its target index for one year. In principle, the ETFs marked in principle are adjusted every six months. The first investigation deadline of the Shanghai -Shenzhen Stock Connect ETF and the Hong Kong Stock Connect ETF was April 29, 2022. For the first time, the list of ETFs and the effective date of the Hong Kong Stock Connect and Shanghai -Shenzhen Stock Connect, the Shanghai -Shenzhen Exchange Securities Trading Service Company and the Stock Exchange Securities Trading Service Company will notify separately.

The second is to regulate the return of mainland investors to participate in the Shanghai Stock Connect trading behavior. The scope and definition standards of mainland investors have clearly clarified that the Shanghai and Shenzhen Stock Connect investors do not include mainland investors. In order to give the Hong Kong brokers and other diploma and other diplomats to fully prepare the time, the relevant provisions will set up a one -year transition period for mainland investors who have opened the Shanghai -Shenzhen shares transaction authority since July 25, 2022.

Wind information data shows that as of June 24, a total of 564 stock -type ETFs listed on the Shanghai and Shenzhen cities were 108 with a scale of more than 1.5 billion yuan. Chen Li predicts that the average amount of assets in the past six months will reach 1.5 billion yuan, and the number of funds with the requirements of the target index will be published at 60 to 80.

Chen Li said that with ETF incorporate interconnection, it will bring more incremental funds to the A -share market. Especially in the context of overseas tightening and relatively loose domestic policies, RMB assets are more attractive. Foreign capital in the second half of the year will be. It is expected to further flow to the domestic market, and the proportion of institutional investors is expected to be further increased.

The CSRC stated that in the next step, the Securities Regulatory Commission will integrate the transaction -type open -end funds into the preparation of the transaction -type open -end funds, and the formal start time will be announced separately.(Editor in charge: Tan Mengtong)

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