Research Department 17 August, 2016 Shirley Gu 古乔艺 Gary Ching 程嘉伟 Grace Liu 刘谷 (86755) 2397 6718 (852) 2509 2665 (852) 2509 7516 [email protected] [email protected] [email protected] Comments on SZ-HK Connect: Another Milestone for MMA 深港通评论：互联互通的又一里程碑事件 Regulators announced Shenzhen-Hong Kong Stock Connect (SZ-HK Connect) Scheme. Chinese Premier Li Keqiang announced that the Shenzhen-Hong Kong Stock Connect plan had been approved by the Chinese government on 16 August 2016. On the same day, China Securities Regulatory Commission (CSRC) and Hong Kong’s Securities and Futures Commission (SFC) made a joint statement regarding the establishment of mutual market access (MMA) between Shenzhen and Hong Kong. The existing aggregate quota under the SH-HK Connect has been removed with immediate effect. According to the joint statement, the official launch of SZ-HK Connect is expected to be in 4 months time. Further details are as follows: 监管部门宣布深港通。中国国务院总理李克强在 8 月 16 日宣布，《深港通实施方案》已或得国务院批准。同日，中国 证监会及香港证监会联合发表关于建立深圳和香港互联互通的公告。即日起沪港通总额度取消，根据联合公告，深港 通正式推出时间预期由即日起计约 4 个月。其他细节如下： Details Shenzhen Southbound - All Hang Seng Composite LargeCap Index and Hang Seng Composite MidCap Index constituents. Connect - Any Hang Seng Composite SmallCap Index constituents with a market capitalisation of HK$5 billion or above - All SEHK-listed A+H shares - Daily Northbound quota: RMB10.5 billion - The investment quota may be adjusted by the parties in light of actual operational performance Shenzhen Northbound - All SZSE Component Index and SZSE Small/MidCap Innovation Index constituents, which have a Connect market capitalization of RMB6 billion or above - All SZSE-listed A+H shares - Trading on the ChiNext Board of SZSE on Northbound link is limited to eligible institutional professional investors in the initial stages - Daily Southbound quota: RMB13 billion - The investment quota may be adjusted by the parties in light of actual operational performance Shanghai & Shenzhen - Aggregate quota abolished Connect - ETFs to be included but roll-out planned in 2017 - Shanghai-Hong Kong remains unchanged Shenzhen-Hong Kong - 4 months from 16 August 2016 Connect Launch Date Source: HKEx, SZSE. See the last page for disclaimer page 1 of 8 内容 深圳港股通 - 所有恒生综合大型股指数的成份股、恒生综合中型股指数的成份股 - 市值 50 亿元港币及以上的恒生综合小型股指数的成份股 - 香港联合交易所上市的 A+H 股公司股票。 - 深圳港股通每日使用额度:105 亿人民币 - 双方可根据运营情况对投资额度进行调整 深股通 - 市值 60 亿元人民币及以上的深证成份指数和深证中小创新指数的成份股 - 深圳证券交易所上市的 A+H 股公司股票 - 深股通开通初期，通过深股通买卖深圳证券交易所创业板股票的投资者仅限于香港相关规则所界定 的机构专业投资者 - 深股通每日使用额度:130 亿人民币 - 双方可根据运营情况对投资额度进行调整 沪港通和深港通 - 总额度取消 - 加入交易所买卖基金并计划于 2017 年推出 - 沪港通维持不变 深港通启动日期 - 由 8 月 16 日起计约 4 个月 数据源； 港交所、深交所 Bigger impacts probable over trading activity in the HK market. Statistics for SH-HK Connect show that as at 16 August 2016, the average daily turnover (ADT) through southbound trading link accounted for 3.9% of the HK market ADT since launch, which is higher than the 0.6% through northbound trading link. In addition, southbound activity witnessed net fund inflows for a consecutive 71 and 58 trading days, starting in the middle of November 2015 and late April 2016, respectively. H-shares continue to enjoy cheaper valuations compared with A-shares, despite the recent decline of the AH Premium Index to a 1-year low of 124.8 on 16 August. Therefore, we expect the HK market to benefit more from the launch of SZ-HK Connect, mainly in terms of boosting trading activities. 对香港市场交易活动或有较大影响。根据沪港通统计数据，由沪港通开通至 8 月 16 日，港股通日均成交额在全市场 的占比为 3.9%，高于沪股通所占的 0.6%。此外，港股通从 2015 年 11 月中旬起以及自 2016 年 4 月起分别录得连续 71 个和 58 个交易日的净流入。最近 AH 溢价指数持续下跌至 8 月 16 日的 1 年来低位 124.8，但 H 股估值仍然相比 A 股便宜。因此，我们预期香港市场将更为受惠于深港通带来的交易量上升。 Deepening MMA and RMB internationalization continue to be long-term catalysts. The launch of SZ-HK Connect could be viewed as another milestone for further extending MMA between the Mainland and HK, and an important step to push forward RMB internationalization as well. It is also expected that additional products (such as ETF) will be included into the MMA scheme and further diversify investable asset pools in the future. Therefore, the HK market could remain as the direct beneficiary and continuously attract a flow of funds. 互通互联深化以及人民币国际化继续是长期催化剂。深港通的推出可被视作进一步扩展中国内地和香港两地联通的又 一里程碑事件，也是推进人民币国际化的一项重要举措。预期更多产品（如 ETF）将纳入互联互通范畴，未来可投资 标的还将进一步多元化。因此，香港市场也继续作为直接受益者，持续吸引资金流入。 Limited influence to further drive up the HK market in the short term. The details and the time of announcement are both basically in line with expectations. The abolishment of the total investment quota is a response mainly to the recent accelerating use of quotas in southbound trading (with the remaining quota below 20%). The HK market has witnessed a consecutive rise starting in 2H16, which has partly reflected the escalating speculation of launching SZ-HK Connect. The HSI reached 23,084 on 16 August, the highest since the beginning of November 2015. Therefore, with the timeline set, investors are likely to take profit in the short term. 短期推动香港市场內进一步上升的动力有限。深港通主要内容和公布时间均基本符合市场预期。沪港通总额度取消主 要回应近期港股通额度使用加快（余额不足 20%）。香港市场自下半年以来持续上升，部分已反映出对公布深港通的 See the last page for disclaimer page 2 of 8 预期升温。其中，8 月 16 日恒指曾上升至 2015 年 11 月以来的新高 23,084 点。因此，随着时间表确定，短期内投资 者可能先行获利。 The HK market is expected to fluctuate in the short term. The announcement of launching SZ-HK Connect removes one of major uncertainty. The latest data pointed to a basic steady growth for the Chinese economy even with some weak indicators. The domestic property market will continue to see policy differentiation. China’s monetary policy stance remains prudent but will also remain flexible. An orderly two-way fluctuation of the RMB currency is expected to uphold on a stabilizing expectation. Global liquidity remains abundant as more countries have recently joined in with rate cut activity. The HSI recorded a decent rally of 17.4% from the lowest point post-UK Brexit vote and hit a 10-month high of 23,084, which has already largely priced in the excitement about SZ-HK Connect in the short term. Overall, we expect a range bound trading on HK market in the near future. 预期港股市场短期波动。深港通的宣布消除了一个主要不确定性。最新数据显示中国经济增长虽有反覆但总体基本平 稳。内地房地产市场将继续因城施策。中国货币政策基调维持稳健但将保持灵活。由于市场预期稳定，人民币继续有 序双向波动。近期更多国家降息，环球流动性保持宽裕。恒指自英国公投后的低位上升 17.4%，并创下 10 个月高位 23,084，已大幅反应了市场对深港通的憧憬。总体来说，我们预计香港市场近期区间震荡。 See the last page for disclaimer page 3 of 8 Appendix Table-1: Hang Seng LargeCap Index Constituents Code Name Code Name Code Name Code Name 00001 HK Ckh Holdings 00270 HK Guangdong Invest 00880 HK Sjm Holdings Ltd 01880 HK Belle Intl 00002 HK Clp Holdings 00288 HK Wh Group Ltd 00883 HK Cnooc 01928 HK Sands China Ltd 00003 HK Hong Kg China Gs 00291 HK China Resources 00939 HK Ccb-H 01929 HK Chow Tai Fook Je 00004 HK Wharf Hldg 00293 HK Cathay Pac Air 00941 HK China Mobile 01972 HK Swireproperties 00005 HK Hsbc Holdings Pl 00322 HK Tingyi 00960 HK Longfor Ppt 01988 HK Minsheng Bank-H 00006 HK Power Assets 00371 HK Bj Ent Water 00966 HK China Taiping In 02007 HK Country Garden 00010 HK Hang Lung Group 00384 HK China Gas Holdin 00992 HK Lenovo Group 02018 HK Aac Technologies 00011 HK Hang Seng Bank 00386 HK Sinopec Corp-H 00998 HK Citic Bank-H 02020 HK Anta Sports Prod 00012 HK Henderson Land D 00388 HK Hkex 01038 HK Cki Holdings 02282 HK Mgm China 00016 HK Shk Ppt 00392 HK Beijing Ent 01044 HK Hengan Intl 02313 HK Shenzhou Intl Gp 00017 HK New World Dev 00494 HK Li & Fung Ltd 01060 HK Ali Pictures 02318 HK Ping An-H 00019 HK Swire Pacific-A 00530 HK Goldin Financial 01088 HK China Shenhua-H 02319 HK Mengniu Dairy 00020 HK Wheelock & Co 00551 HK Yue Yuen Ind 01109 HK China Res Land 02328 HK Picc P&C-H 00023 HK Bank East Asia 00656 HK Fosun Intl 01113 HK Cheung Kong Prop 02388 HK Boc Hong Kong Ho 00027 HK Galaxy Entertain 00659 HK Nws Holdings 01114 HK Brilliance China 02601 HK China Pacific-H 00066 HK Mtr Corp 00669 HK Techtronic Ind 01128 HK Wynn Macau Ltd 02628 HK China Life-H 00069 HK Shangri-La Asia 00683 HK Kerry Ppt 01169 HK Haier Electronic 02688 HK Enn Energy 00083 HK Sino Land 00688 HK China Overseas 01177 HK Sino Biopharm 03311 HK China State Cons 00101 HK Hang Lung Ppt 00700 HK Tencent 01193 HK China Res Gas 03328 HK Bankcomm-H 00135 HK Kunlun Energy 00728 HK China Telecom-H 01288 HK Abc-H 03333 HK China Evergrand 00144 HK China Mer Hold 00762 HK China Unicom 01299 HK Aia 03799 HK Dali Foods Group 00151 HK Want Want China 00813 HK Shimao Property 01359 HK China Cinda-H 03968 HK Cm Bank-H 00241 HK Alibaba Health 00823 HK Link Reit 01398 HK Icbc-H 03988 HK Bank Of China-H 00257 HK China Everbr Int 00836 HK China Res Power 01800 HK China Com Cons-H 06808 HK Sun Art Retail 00267 HK Citic 00857 HK Petrochina-H Source: Hang Seng Indexes Company Limited. Table-2: Hang Seng MidCap Index Constituents Code Name Code Name Code Name Code Name 00008 HK Pccw Ltd 00570 HK Trad Chi Med 01165 HK Sfce 02186 HK Luye Pharma Grou 00014 HK Hysan Dev 00576 HK Zhejiangexpre-H 01171 HK Yanzhou Coal-H 02202 HK China Vanke-H 00041 HK Great Eagle 00586 HK Conch Venture 01186 HK China Rail Cn-H 02238 HK Guangzhou Auto-H 00081 HK China Overseas G 00590 HK Luk Fook Hldgs I 01199 HK Cosco Pac Ltd 02298 HK Cosmo Lady China 00086 HK Sun Hung Kai Co 00604 HK Shenzhen Invest 01205 HK Citic Resources 02314 HK Lee & Man Paper 00109 HK Good Resources H 00606 HK China Agri-Indus 01208 HK Mmg 02329 HK Guorui Ppt 00119 HK Poly Property 00607 HK Fullshare 01211 HK Byd Co Ltd-H 02333 HK Great Wall Mot-H 00123 HK Yuexiu Property 00636 HK Kerry Logistics 01212 HK Lifestyle Intl 02338 HK Weichai Power-H 00136 HK Hengten Networks 00639 HK Shougang Fushan 01230 HK Yashili Int'L 02356