SINGAPORE (August  13): Trade war or not, the opening up of the Chinese equity market to global investors continues. Despite the Shanghai Stock Exchange Composite Index and the Shenzhen Stock Exchange Component Index hovering near two-year lows, with the former down 16% and the latter down 23%, the Shanghai-Shenzhen-Hong Kong Stock Connect volumes continue to be large. 

The stock connect is a programme that allows international and Mainland Chinese investors to trade securities in each other’s markets through the trading and clearing facilities of their home exchange. It makes buying and selling China A-shares a lot easier for portfolio managers. In July, the average daily turnover for the north-bound Shanghai-Hong Kong Stock Connect trades was RMB10.85 billion ($2.16 billion), while average daily turnover for the Shenzhen-Hong Kong Stock Connect was RMB8.75 billion. Because Hong Kong’s settlement is T+2, stock connect trades are settled in T+3, with the extra day for forex settlement. 

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