'More details needed' about HK-Shanghai stock program

Brokerages on the Chinese mainland and in Hong Kong are preparing the staff and technology needed to launch a pilot cross-border stock trading program, but industry insiders said it's premature to predict the impact on either market until more policy details are announced.

Several brokerages said that the Shanghai Stock Exchange had asked brokerages to submit applications by Friday to participate in the pilot program. The notice told participating brokerages to finish technology and support-staff preparations before the end of July.

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The Shanghai and Hong Kong exchanges announced in April the Hong Kong-Shanghai Stock Connect program, which will allow investors to trade eligible shares in each other's market. The program is expected to start in October.

"The trading mechanisms and information disclosure requirements in Hong Kong are different from Shanghai, so we have to make some adjustments. We're waiting for more details from the SSE to make arrangements," said an analyst surnamed Sun with a securities firm in Shanghai.

"There's interest from individuals and from institutional investors such as offshore funds, especially involving some special shares like Kweichou Moutai that are only listed on the A-share market," said Eliot Li, director of sales for First Shanghai Financial Holding Ltd.

Currently, Hong Kong and foreign investors interested in A shares can only buy them through the qualified foreign institutional investor program or the renminbi qualified foreign institutional investor program, which is only open to institutional investors.

Li said his firm, based in Hong Kong but possessing A-share market analysis expertise, is preparing trading systems and training professionals for the new cross-border program, also known as the "through train".

His company is also "educating" local and foreign investors about the value of some A-share listed companies.