Wednesday, January 16, 2008

Another Positive Down The Drain

The HK market was supposed to be on the receiving end of a the "through-train" program which would have allowed individuals from the mainland to trade in all HK listed securities. The proposal back in August caused a dramatic revaluation in the HK market. However, owing to the corrective phase in Shanghai and Shenzhen, apparently the long-awaited through-train scheme will not start for at least two years.

The program for individual mainland investors to put money directly into Hong Kong stocks has been held up because the mainland authorities want more time to make sure everything is running smoothly in the new system before opening it up to the public. Also, the authorities feel there is no need to rush the launch of the through- train program since mainland investors can already use the QDII program to invest their money overseas. BS, the reason why the program was delayed was due to the significant pullback in China stock markets. If the Shanghai and Shenzhen markets had continued to surged, believe you me, the "through-train" program would have been accelerated to allow liquidity to pour out of the system.

When news of the program first surfaced in August, the market became flush with excitement, thinking a torrent of money might start flowing into Hong Kong almost immediately. Now, we will see the same air being sucked out of the system in HK. Downgrade on HK immediately. The sentiment has turned.


xatomic said...

I think its way oversold..lost over 2000 points over a few days

Faith said...

Agree -- both H & S shares free fall down as they went up owing to thru train program. The catalyst for the upsurge is gone now.

On the other hand, there are good buy for some H shares during this brutal sell off.

Boon Heng said...

May i know where you find the news of
though train being delayed for at least 2 years?

Salvatore_Dali said...

just read any hk papers on line today

bantersy said...

hi dali,

thanks for the advice. you are right. the only way is down. the longer i stay, the weaker i get.

on the through train programme, i search through and yahoo hk, found the following.


(2008-01-15 12:30 pm)



it did not mention any postponment of the programme. hope you can direct some of us to the info. thanks a lot!

bantersy said...

for the benefits of dali's readers.

By Chris Oliver
Last update: 11:03 p.m. EST Jan. 15, 2008

HONG KONG (MarketWatch) -- A proposal by Chinese authorities to enable individual investors to buy Hong Kong-listed stocks under the so-called "through-train" scheme could be delayed by two years, according to a published report. The delay is intended to give Chinese authorities more time to make sure the necessary systems are operating properly and ensure a smooth introduction when trading begins, the Hong Kong daily The Standard reported Wednesday, without identifying its source. The scheme, first announced in August, is widely viewed as a catalyst for the dramatic rise in share prices that lifted the benchmark Hang Seng Index to a record in November.

Salvatore_Dali said...

It was in The Standard HK this morning, but now I just check, it had been taken off. Well, I can't be making these things up.

bantersy said...


no one is doubting you. no worry.

i was searching in The Standard too but to no avail.

Anyway, i manage to find something from standards and had paste in this column.

solomon said...

I believe the through train program will happen this year.

They always send the news out to test the market reaction, a typical Chinese move.

While with no basis I hold, I think HK market is going for bull market after CNY.

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