The CSRC on 15 November announced that H-share full circulation, which has been tried in pilot companies for over one year, will be allowed in pure-H-share companies.
Credit Suisse said the move means the "domestic shares" or shares held by foreign shareholders which are not allowed to circulate in the market, can now be sold in the Hong Kong market after approvals.
It expects the market may be nervous in the short term for the pressure created by supply increase. In total, shares valued at HK$1.5tn can be sold in the Hong Kong market, in theory. In the long run, Credit Suisse argued the performance of stocks will largely be decided by the fundamentals of each company.
Based on its screening of 280 H-share-listed companies, 149 are eligible pure-H-share-listed companies (the ones to list in the A-share market are excluded). They represent a combined market cap of HK$2.3tn, of which HK$717bn is already in circulation, Credit Suisse said.
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