Chinese stocks may be about to receive another major boost

In what may act as another boon to China’s hot stock market, there’s talk that the proposed Shenzhen-Shanghai stock connect may be launched in early October.

According to the Chinese state-run People’s Daily, citing a report in the state-run Securities Daily, the Shenzhen-Hong Kong Stock Connect program may be launched sometime around October 1 as part of China’s National Day celebrations.

Hong Kong financial secretary John Tsang Chun-wah said Hong Kong is prepared for the Shenzhen-Hong Kong Stock Connect. He also stipulates that the Chinese government would launch the program “at an appropriate time” but didn’t provide a specific date for the program’s launch.

When the Shanghai-Hong Kong stock connect launched on November 17 last year its introduction coincided with a 140% plus rally on China’s benchmark Shanghai Composite index.

The proposed Shenzhen-Hong Kong connect will assist Chinese A-shares to be included in the MSCI’s emerging market index.

“The upcoming launch of the Shenzhen-Hong Kong Stock Connect program and potential further liberalization of the QFII program could further improve the overall accessibility of the China A-shares market for international institutional investors,” the MSCI said in June.

Once mainland China stocks are included, particularly if granted full inclusion by the MSCI, this could see capital inflows worth hundreds of billions of dollars.

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