The Shanghai Shuffle

It looks likely that the Tianjin pilot project to allow Mainland individaul investors to invest directly in HK shares will be extended to Shanghai which will team up with ICBC. Although many had expected Shanghai to object to the Tianjin scheme, Shanghai apparently decided to "get with the programme" and cut themselves in.

It is also interesting that they have chosen to go with ICBC one of the 3 Mainland banks listed in HK. China Construction bank "CCB" is the only one left without a partner. I would assume that one of the other major cities, such as Chongqing, may be next. The Chinese way is to share the goodies.

HK is becoming more and more a Mainland market with over 50% of the market capitalisation, 60% of the dialy trading, and 90% of IPO's being Mainland companies. As we become more integrated with the Mainland, we will become more like the mainland market i.e. "policy" driven.

The Shanghai market set a new high today above 5,000 points on the index, and we went along for the ride closing up 620 to 22,966 on the HSI. Another day like today and we will be hitting new highs. Personally, I won't be betting against it.

Market Indices

• Hong Kong Hang Seng: 22,966.97 +2.77%
• Japan Nikkei: 16,316.32 +2.61%
• Shanghai Composite: 5,032.49 +1.05%
• Singapore STI*: 3,380.05 +1.76%
• South Korea Composite: 1,799.72 +2.29%
• Taiwan Weighted: 8,732.84 +2.82%