Some market observers expect the Shenzhen-Hong Kong Stock Connect program to bolster the H-shares market as mainland investors shift into cheaper Hong Kong-listed Chinese companies. The $5.3 billion FXI is heavily allocated to state-controlled companies, as highlighted by the ETF’s 52.2% weight to financial services companies.
“Depressed valuations are luring bargain hunters from across the border. Mainland investors have been net buyers of Hong Kong stocks through the city’s exchange link since Nov. 27, while technical indicators suggest a rebound is overdue,” according to Bloomberg.
iShares China Large-Cap ETF
