Fueling the trades, mainland investors used up their daily 10.5 billion yuan, or $1.7 billion, quota to invest in Hong Kong through the recently adopted Shanghai-Hong Kong Stock Connect program for the first time since it began in November. Notable action came from mainland mutual funds accessing Stock Connect, which was previously limited to wealthy individuals.
Additionally, some mainland investors may have seen Hong Kong’s stocks as bargains after the rally in their domestic markets. The Shanghai index has increased 90% in the past year, whereas the Hang Seng has gained 15%. Over the past year, the iShares MSCI Hong Kong ETF (NYSEArca: EWH) rose 14.3% while ASHR jumped 97.6%.
iShares China Large-Cap ETF
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Max Chen contributed to this article.