Staff reporter and Bloomberg
The Hong Kong Exchanges and Clearing (0388) has stopped disclosing real-time turnover data for northbound trading under a stock connect program with the mainland from today following A-share market practices.
Northbound trading is a channel for international investors to access Chinese stocks listed in the mainland market. The disclosure of intraday turnover for southbound trading remains unchanged, according to a circular by HKEX.
The adjustment was based on decisions announced by the Shanghai and Shenzhen exchanges and HKEX on April 12.
Meanwhile, the daily quota balance, which used to have real-time data available, now only shows such real-time data when it falls below 30 percent, otherwise, it will be indicated as “available,” according to the circular.
While authorities said this aligned with international practices, it also marked an attempt to limit the impact of data showing foreign funds selling on market sentiment. Intraday readings showing foreign outflows were partly blamed for worsening sentiment among Chinese retail investors, who still dominate local trading, during several episodes of intense selloffs over the past year. Some participants had urged the authorities to obscure such figures.
”There are surely some funds out there that factor the short-term flows of northbound investors into their models, so it could lead to a lower trading frequency for some without the real-time data,” said Chen Shi, fund manager at Shanghai Jade Stone Investment Management “But to value investors it doesn’t really matter if they release the figure monthly as intraday is mostly just noise.”
The world’s second-biggest stock market has rallied since February, after Beijing introduced a slew of rescue measures from wider trading curbs to purchases by state funds and naming a new head for the securities regulator.
The rebound has gained more traction in recent weeks, buoyed by fresh signs of economic recovery and the return of foreign money.
Northbound investors delivered a third straight month of buying on a net basis in April, the longest such stretch in a year which included a record daily purchase. The inflows have continued this month with another 4.8 billion yuan (HK$5.2 billion), which means overseas funds have added back more than half of what they had sold since August.
