Real-time disclosure of northbound capital transaction information officially cancelled
May 13 marked the first trading day after the official cancellation of real-time disclosure of northbound capital transaction information. The move, which was aimed at helping the market operate more smoothly, saw northbound funds selling a net of 4.591 billion yuan on that day.
In terms of individual stocks, COSCO Shipping Holdings, Midea Group, and Yangtze Power were among those being net sold for amounts of 369 million yuan, 287 million yuan, and 247 million yuan respectively. On the other hand, Northern Huachuang was the top net buyer with 286 million yuan.
The decision to cancel the real-time disclosure was announced by the Hong Kong Stock Exchange on May 11. The move came after successful pre-launch tests and adjustments to the trading volume and daily quota balance of northbound trading. This adjustment aimed to optimize the Shanghai-Shenzhen-Hong Kong Stock Connect mechanism and ensure consistency in market information disclosure.
The Shanghai-Hong Kong Stock Connect mechanism was launched in 2014, allowing foreign investors to directly purchase A-shares through the Hong Kong stock market. The opening of this mechanism marked the beginning of northbound trading, with the Shenzhen-Hong Kong Stock Connect channel being launched in 2016 to further expand the scope of northbound transactions.
According to Meng Lei, a strategy analyst at UBS Securities, the previous high frequency of disclosure of northbound capital transaction information could have had a significant impact on the expectations of domestic investors and market volatility. The adjustment to the information disclosure mechanism is expected to ensure higher fairness for different types of investors participating in the A-share market.
Overall, market experts believe that while high-frequency disclosure may have initially helped attract more investors’ attention, a more reasonable disclosure frequency will ultimately contribute to the smooth operation of the market. The adjustment aims to strike a balance between transparency and market stability, benefiting both local and foreign investors.