最高法院指导性案例:马乐内幕信息交易案

指导案例61号

马乐利用未公开信息交易案

(最高人民法院审判委员会讨论通过2016年6月30日发布)

关键词刑事/利用未公开信息交易罪/援引法定刑/情节特别严重

  裁判要点

  刑法第一百八十条第四款规定的利用未公开信息交易罪援引法定刑的情形,应当是对第一款内幕交易、泄露内幕信息罪全部法定刑的引用,即利用未公开信息交易罪应有“情节严重”“情节特别严重”两种情形和两个量刑档次。

  相关法条

  《中华人民共和国刑法》第180条

  基本案情

  2011年3月9日至2013年5月30日期间,被告人马乐担任博时基金管理有限公司旗下的博时精选股票证券投资经理,全权负责投资基金投资股票市场,掌握了博时精选股票证券投资基金交易的标的股票、交易时间和交易数量等未公开信息。马乐在任职期间利用其掌控的上述未公开信息,从事与该信息相关的证券交易活动,操作自己控制的“金某”“严某甲”“严某乙”三个股票账户,通过临时购买的不记名神州行电话卡下单,先于(1-5个交易日)、同期或稍晚于(1-2个交易日)其管理的“博时精选”基金账户买卖相同股票76只,累计成交金额10.5亿余元,非法获利18833374.74元。2013年7月17日,马乐主动到深圳市公安局投案,且到案之后能如实供述其所犯罪行,属自首;马乐认罪态度良好,违法所得能从扣押、冻结的财产中全额返还,判处的罚金亦能全额缴纳。

  裁判结果

  广东省深圳市中级人民法院(2014)深中法刑二初字第27号刑事判决认为,被告人马乐的行为已构成利用未公开信息交易罪。但刑法中并未对利用未公开信息交易罪规定“情节特别严重”的情形,因此只能认定马乐的行为属于“情节严重”。马乐自首,依法可以从轻处罚;马乐认罪态度良好,违法所得能全额返还,罚金亦能全额缴纳,确有悔罪表现;另经深圳市福田区司法局社区矫正和安置帮教科调查评估,对马乐宣告缓刑对其所居住的社区没有重大不良影响,符合适用缓刑的条件。遂以利用未公开信息交易罪判处马乐有期徒刑三年,缓刑五年,并处罚金人民币1884万元;违法所得人民币18833374.74元依法予以追缴,上缴国库。

  宣判后,深圳市人民检察院提出抗诉认为,被告人马乐的行为应认定为犯罪情节特别严重,依照“情节特别严重”的量刑档次处罚。一审判决适用法律错误,量刑明显不当,应当依法改判。

  广东省高级人民法院(2014)粤高法刑二终字第137号刑事裁定认为,刑法第一百八十条第四款规定,利用未公开信息交易,情节严重的,依照第一款的规定处罚,该条款并未对利用未公开信息交易罪规定有“情节特别严重”情形;而根据第一百八十条第一款的规定,情节严重的,处五年以下有期徒刑或者拘役,并处或者单处违法所得一倍以上五倍以下罚金,故马乐利用未公开信息交易,属于犯罪情节严重,应在该量刑幅度内判处刑罚。原审判决量刑适当,抗诉机关的抗诉理由不成立,不予采纳。遂裁定驳回抗诉,维持原判。

  二审裁定生效后,广东省人民检察院提请最高人民检察院按照审判监督程序向最高人民法院提出抗诉。最高人民检察院抗诉提出,刑法第一百八十条第四款属于援引法定刑的情形,应当引用第一款处罚的全部规定;利用未公开信息交易罪与内幕交易、泄露内幕信息罪的违法与责任程度相当,法定刑亦应相当;马乐的行为应当认定为犯罪情节特别严重,对其适用缓刑明显不当。本案终审裁定以刑法第一百八十条第四款未对利用未公开信息交易罪规定有“情节特别严重”为由,降格评价马乐的犯罪行为,属于适用法律确有错误,导致量刑不当,应当依法纠正。

  最高人民法院依法组成合议庭对该案直接进行再审,并公开开庭审理了本案。再审查明的事实与原审基本相同,原审认定被告人马乐非法获利数额为18833374.74元存在计算错误,实际为19120246.98元,依法应当予以更正。最高人民法院(2015)刑抗字第1号刑事判决认为,原审被告人马乐的行为已构成利用未公开信息交易罪。马乐利用未公开信息交易股票76只,累计成交额10.5亿余元,非法获利1912万余元,属于情节特别严重。鉴于马乐具有主动从境外回国投案自首法定从轻、减刑处罚情节;在未受控制的情况下,将股票兑成现金存在涉案三个账户中并主动向中国证券监督管理委员会说明情况,退还了全部违法所得,认罪悔罪态度好,赃款未挥霍,原判罚金刑得已全部履行等酌定从轻处罚情节,对马乐可予减轻处罚。第一审判决、第二审裁定认定事实清楚,证据确实、充分,定罪准确,但因对法律条文理解错误,导致量刑不当,应予纠正。依照《中华人民共和国刑法》第一百八十条第四款、第一款、第六十七条第一款、第五十二条、第五十三条、第六十四条及《最高人民法院关于适用〈中华人民共和国刑事诉讼法〉的解释》第三百八十九条第(三)项的规定,判决如下:一、维持广东省高级人民法院(2014)粤高法刑二终字第137号刑事裁定和深圳市中级人民法院(2014)深中法刑二初字第27号刑事判决中对原审被告人马乐的定罪部分;二、撤销广东省高级人民法院(2014)粤高法刑二终字第137号刑事裁定和深圳市中级人民法院(2014)深中法刑二初字第27号刑事判决中对原审被告人马乐的量刑及追缴违法所得部分;三、原审被告人马乐犯利用未公开信息交易罪,判处有期徒刑三年,并处罚金人民币1913万元;四、违法所得人民币19120246.98元依法予以追缴,上缴国库。

  裁判理由

  法院生效裁判认为:本案事实清楚,定罪准确,争议的焦点在于如何正确理解刑法第一百八十条第四款对于第一款的援引以及如何把握利用未公开信息交易罪“情节特别严重”的认定标准。

  一、对刑法第一百八十条第四款援引第一款量刑情节的理解和把握

  刑法第一百八十条第一款对内幕交易、泄露内幕信息罪规定为:“证券、期货交易内幕信息的知情人员或者非法获取证券、期货交易内幕信息的人员,在涉及证券的发行,证券、期货交易或者其他对证券、期货交易价格有重大影响的信息尚未公开前,买入或者卖出该证券,或者从事与该内幕信息有关的期货交易,或者泄露该信息,或者明示、暗示他人从事上述交易活动,情节严重的,处五年以下有期徒刑或者拘役,并处或者单处违法所得一倍以上五倍以下罚金;情节特别严重的,处五年以上十年以下有期徒刑,并处违法所得一倍以上五倍以下罚金。”第四款对利用未公开信息交易罪规定为:“证券交易所、期货交易所、证券公司、期货经济公司、基金管理公司、商业银行、保险公司等金融机构的从业人员以及有关监管部门或者行业协会的工作人员,利用因职务便利获取的内幕信息以外的其他未公开的信息,违反规定,从事与该信息相关的证券、期货交易活动,或者明示、暗示他人从事相关交易活动,情节严重的,依照第一款的规定处罚。”

  对于第四款中“情节严重的,依照第一款的规定处罚”应如何理解,在司法实践中存在不同的认识。一种观点认为,第四款中只规定了“情节严重”的情形,而未规定“情节特别严重”的情形,因此,这里的“情节严重的,依照第一款的规定处罚”只能是依照第一款中“情节严重”的量刑档次予以处罚;另一种观点认为,第四款中的“情节严重”只是入罪条款,即达到了情节严重以上的情形,依据第一款的规定处罚。至于具体处罚,应看符合第一款中的“情节严重”还是“情节特别严重”的情形,分别情况依法判处。情节严重的,“处五年以下有期徒刑”,情节特别严重的,“处五年以上十年以下有期徒刑”。

  最高人民法院认为,刑法第一百八十条第四款援引法定刑的情形,应当是对第一款全部法定刑的引用,即利用未公开信息交易罪应有“情节严重”“情节特别严重”两种情形和两个量刑档次。这样理解的具体理由如下:

  (一)符合刑法的立法目的。由于我国基金、证券、期货等领域中,利用未公开信息交易行为比较多发,行为人利用公众投入的巨额资金作后盾,以提前买入或者提前卖出的手段获得巨额非法利益,将风险与损失转嫁到其他投资者,不仅对其任职单位的财产利益造成损害,而且严重破坏了公开、公正、公平的证券市场原则,严重损害客户投资者或处于信息弱势的散户利益,严重损害金融行业信誉,影响投资者对金融机构的信任,进而对资产管理和基金、证券、期货市场的健康发展产生严重影响。为此,《中华人民共和国刑法修正案(七)》新增利用未公开信息交易罪,并将该罪与内幕交易、泄露内幕信息罪规定在同一法条中,说明两罪的违法与责任程度相当。利用未公开信息交易罪也应当适用“情节特别严重”。

  (二)符合法条的文意。首先,刑法第一百八十条第四款中的“情节严重”是入罪条款。《最高人民检察院、公安部关于公安机关管辖的刑事案件立案追诉标准的规定(二)》,对利用未公开信息交易罪规定了追诉的情节标准,说明该罪需达到“情节严重”才能被追诉。利用未公开信息交易罪属情节犯,立法要明确其情节犯属性,就必须借助“情节严重”的表述,以避免“情节不严重”的行为入罪。其次,该款中“情节严重”并不兼具量刑条款的性质。刑法条文中大量存在“情节严重”兼具定罪条款及量刑条款性质的情形,但无一例外均在其后列明了具体的法定刑。刑法第一百八十条第四款中“情节严重”之后,并未列明具体的法定刑,而是参照内幕交易、泄露内幕信息罪的法定刑。因此,本款中的“情节严重”仅具有定罪条款的性质,而不具有量刑条款的性质。

  (三)符合援引法定刑立法技术的理解。援引法定刑是指对某一犯罪并不规定独立的法定刑,而是援引其他犯罪的法定刑作为该犯罪的法定刑。刑法第一百八十条第四款援引法定刑的目的是为了避免法条文字表述重复,并不属于法律规定不明确的情形。

  综上,刑法第一百八十条第四款虽然没有明确表述“情节特别严重”,但是根据本条款设立的立法目的、法条文意及立法技术,应当包含“情节特别严重”的情形和量刑档次。

  二、利用未公开信息交易罪“情节特别严重”的认定标准

  目前虽然没有关于利用未公开信息交易罪“情节特别严重”认定标准的专门规定,但鉴于刑法规定利用未公开信息交易罪是参照内幕交易、泄露内幕信息罪的规定处罚,最高人民法院、最高人民检察院《关于办理内幕交易、泄露内幕信息刑事案件具体应用法律若干问题的解释》将成交额250万元以上、获利75万元以上等情形认定为内幕交易、泄露内幕信息罪“情节特别严重”的标准,利用未公开信息交易罪也应当遵循相同的标准。马乐利用未公开信息进行交易活动,累计成交额达10.5亿余元,非法获利达1912万余元,已远远超过上述标准,且在案发时属全国查获的该类犯罪数额最大者,参照最高人民法院、最高人民检察院《关于办理内幕交易、泄露内幕信息刑事案件具体应用法律若干问题的解释》,马乐的犯罪情节应当属于“情节特别严重”。

  (生效裁判审判人员:罗智勇、董朝阳、李剑弢)

http://www.court.gov.cn/fabu-xiangqing-23101.html

Delisting

 

“上市难”必然导致“退市更难”

2016年08月22日 11:39 来源于 财新网

  【财新网】(专栏作家 董登新)总有人误以为,要推行注册制,必须首先改革退市制度,这是一种因果颠倒、本末倒置的看法。事实上,垃圾股死不退市的原因就是核准制。因为“上市难”,所以“退市更难”。因此,要想退市制度发挥功效,就必须首先实现IPO注册制。换句话说,没有注册制,退市制度就只能是摆设。二者的逻辑关系无法改变、也不可能颠倒。

NASDAQ作为世界上最成功的创业板,我们曾经看到如此壮观的景象:20世纪90年代中期之前,NASDAQ每年IPO的家数可达500至700家,同时每年退市家数可达300至500家,1996年底,NASDAQ上市公司总数约为5600家。然而,此后,NASDAQ每年退市多达500至700家,而每年IPO则降为300至500家,结果导致NASDAQ上市公司总数出现了下降,曾经一度不足3000家。这就是NASDAQ的“大进大出”的生命力,这是大浪淘沙的博大胸怀与摧枯拉朽!不仅如此,NASDAQ还构建了“亏损上市”的IPO机制,鼓励新业态、新技术发展壮大,它的大气与包容创造了历史,并培育出了一批世界级的伟大企业,例如微软、苹果、因特尔、百度、新浪、搜狐等。

再看中国创业板,2009年创设,至今走过7个年头,其上市公司总数才达到500家,创业板总市值占中国股市总市值的比重仅有10%!它远无法满足中国股民偏好炒小、炒新的巨大需求,在供求关系严重扭曲的背景下,即便大熊市平均市盈率也能高达100倍,目前仍接近80倍。创业板股价普遍严重高估值,至今更没有一家公司退市,这就是中国股市的“上市难、退市更难”的最真实写照!中国股民最爱打新、炒新,却又十分害怕新股扩容,这就是核准制的扭曲。

其实,中国A股退市制度在设计理念和方法上,已经十分先进,比方,市场化程度最高的“1元退市标准”、成交量退市标准,以及防止利润操纵的总资产退市标准、净资产退市标准都已纳入A股退市制度,然而,为什么如此先进的退市制度仍成摆设?为什么垃圾股总是死不退市?因为我们没有注册制,只有行政审批的核准制。

实际上,退市制度是寄生在发审制度上的一个联体婴儿,二者不能分割。因为“上市难”,所以“退市更难”,这是因果关系、无法颠倒。A股现行IPO核准制的实质是行政审批制,它是指令性计划管制,是过度行政干预,也是“饥饿式”计划配给制,因此,企业要想拿到IPO批文和指标,确实比登天还难,因为IPO排长队有的要长达两、三年,这是最大的时间成本和不确定性,由于“好中选好、优中选优”的选美机制,再加上行政审批,成功过会的风险更大,这就是IPO的惊魂一跃!一旦成功过会,企业身价百倍,当然,它也会带来IPO身价百倍,因为我们的核准制让IPO成为了一种极其稀缺的珍贵资源,它让企业可以不择手段地去公关争夺,这样,就会有巨大的圈钱机会,当然,这也为监管者留下了权力寻租空间!

尤其是对于企业而言,一旦IPO成功,也就万事大吉。这与成熟市场的情形完全相反,比方,在美国股市,IPO很容易,然而一旦IPO后就会十分难受,因为政府监管、市场监督太严厉,它让许多中资企业倍感压力和不安,因此,不少中资概念股最后选择回国或私有化,甚至主动退市。这就是两类IPO体制下的两重天!因为中国企业将IPO看作是“毕业典礼”,而成熟市场的企业却将IPO看作是“开学典礼”。

既然A股IPO如此艰难、成本高昂、风险巨大,那么,与其排队两、三年,将时间和金钱都赔给了时间和券商,倒不如到二级市场寻找一个肮脏的“壳”公司,只要振臂一呼、股民就会奋勇参与共同炒壳重组,结果就是皮包公司买壳上市、股民买单的不归路。这样的曲线上市,谁也管不着,谁也不用求,只要率领股民共赴垃圾股赌博,就有可能操作成功、一夜暴富!这样的A股市场,还哪有什么垃圾股退市?因为垃圾股都成为了皮包公司的抢手货、股民的香饽饽!于是全民流行暴炒垃圾股,一起参赌破产保壳重组游戏,享受赌博的过程,或许还能实现发财梦,何乐而不为?这也是人生的一种刺激体验。

其实,有什么样的制度和市场,就一定会有什么样的投资者。核准制就是不让投资者独立判断、自担风险,而是由监管者辛苦代劳或越俎代庖,美其名曰:保护中小投资者。在核准制下,一些发行人为了拿到IPO批文,甚至甘冒犯罪风险,与保荐人、承销商合谋,不择手段包装,甚至信息造假,它们一旦IPO,圈钱到手,也就万事大吉。同样,投资者打新、炒新根本不需要自己判断,闭着眼睛就敢参与,因为所有新股上市都要连拉N个涨停板,有些新股若不能一口气拉升至200元是不会罢休的。这就是糟糕透顶的、行政审批的核准制!

因此,只有IPO注册制,才能拯救A股市场。只有注册制,才能让监管者成为真正的市场监管者,而不再是IPO审批者;只有注册制,才能让股民成为真正的投资者,而不再赌博;只有注册制,才能让发行人与证券中介承担连带的法律责任,并有效威慑证券犯罪与信息造假活动。

只有注册制,才能让IPO身价暴跌,才能让“新股不败”变成“新股破发”;只有注册制,才能让垃圾股的壳资源变得分文不值,因“上市易”导致“退市更易”,“死不退市”变成“高效退市”,并让1元股成为垃圾股的代名词。到那时,A股市场将会是“大进大出”的大格局。在所有退市公司中,将有一半是自动退市或主动退市,而在另一半强制退市中,又将有一半是因为1元退市标准而退市。这就是IPO注册制的未来,这就是A股市场明天的希望:慢牛短熊时代将会到来!

最后说明:监管者与投资者大可不必谈虎色变,似乎一提注册制就会心脏骤停。其实,IPO注册制更适合在市场低位推出。可以断定,IPO注册制落地之日,就是A股市场结束调整、向上攀升之时。注册制实施已无退路,证监会也无其他选项。

作者为武汉科技大学金融证券研究所所长

本文网址: http://opinion.caixin.com/2016-08-22/100980166.html
Shenzhen-Hong Kong Stock Connect: Several Reports

The South China Morning Post (SCMP)

 

The Wall Street Journal

China Approves Shenzhen-Hong Kong Stock Link
Stock-trading link’s opening date hasn’t been announced

China’s Shenzhen market, already the world’s seventh-largest, could prove attractive to foreign investors because it is where fast-growing Chinese companies that operate in sectors such as technology, pharmaceuticals and clean energy often list. PHOTO: BLOOMBERG NEWS
By GREGOR STUART HUNTER and CHAO DENG
Updated Aug. 16, 2016 5:42 p.m. ET

SHANGHAI—China is opening the doors to its tech-heavy Shenzhen exchange and scrapping important limits on how much foreigners can invest in the country’s stocks, to entice more global players into its markets.

The moves are a milestone in the decadeslong opening up of China’s financial markets and could mark a return to liberalization after a year in which regulators have tried to clamp down on the country’s notoriously volatile stock trading.

They could help also attract foreign investors, who have avoided Chinese stocks amid a surge in emerging-market investment this year. They could persuade MSCI Inc. to finally add China to its emerging-market indexes, after snubs in the last three years, a step which could see billions of dollars pour into Chinese shares. MSCI declined to comment.

Chinese stock markets—and particularly the Shenzhen exchange—retain a reputation for casinolike behavior. Not all curbs are being lifted. Daily trading inflows into both Shenzhen and Shanghai, China’s other main market, will remain capped at 13 billion yuan ($1.96 billion) a day, and many Shenzhen-listed companies will still be off limits.

Chinese regulators have shown a tendency to reverse course on market changes and crack down on free trading when stocks plunge. The moves to encourage money into Chinese stocks comes as authorities there have been grappling with heavy capital outflows.

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5 Things on the Stock Connect Plan
“It’s just another milestone in terms of reiterating Beijing’s intents on opening China’s markets to international investors,” said Monique France, senior vice president at Mirae Asset Global Investments (USA) LLC. Mirae has invested in China through shares listed in Shanghai and Hong Kong and is likely to add some stocks from Shenzhen once the program begins, she said.
But the $3.2 trillion Shenzhen market, already the world’s seventh largest, could prove attractive to foreign investors because it is where fast-growing Chinese companies that operate in sectors such as technology, pharmaceuticals and clean energy often list. By contrast, Shanghai, which foreign investors can already access via a trading link with Hong Kong, is dominated by less-vibrant state-owned banks and oil companies.

“Shenzhen is widely regarded as being a bit like the Nasdaq in its characteristics,” said Mark Tinker, head of asset manager AXA Framlington Asia. “People looking to participate in the growth of China are looking more keenly to Shenzhen, and if this gives easier access to participate in that market, then it’s going to be regarded as another positive step in the integration of China with the rest of the world.”

The start date for the so-called Shenzhen-Hong Kong Connect is still unclear, although the statement announcing the launch said it should now come by the end of this year.

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“Preparation work for the Shenzhen-Hong Kong Connect is basically done,” China’s State Council, the country’s top policy-making body, said Tuesday.

The move will place some 880 Shenzhen-listed stocks, representing more than $1 trillion in market capitalization, onto the menu of global investors. The ChiNext, a listing board focused on fast-growing startups, will also be opened up, though limited to professional institutional investors.

Regulators also said there would no longer be an upper limit on the total amount of Chinese shares foreigners can hold. Currently, global investors can buy up to 300 billion yuan worth of shares in more than 500 Shanghai companies.

Still, foreign investors used to trading mostly on major Western markets will find plenty of oddities trading in Chinese stocks, including rules that prohibit day-trading of stocks, market holidays that fall on different days on each side of the border, and regulatory restrictions that make it virtually impossible to short stocks.

“I don’t think it’s crucial for people to be invested in Shenzhen at this point, but longer term there will be opportunities,” said Ilya Feygin, managing director at brokerage WallachBeth Capital. “For me, Shenzhen is like the Nasdaq was in the 90s and 80s—it had a few bubbles but risk also represents opportunity.”

When the Shanghai-Hong Kong Stock Exchange opened in late 2014, it led to predictions that billions of dollars would flow into shares of companies in China, where growth, while faltering, is still far higher than in most major economies.

But the launch was marred by regulatory and tax issues, and foreign interest was further chilled by the collapse in Shanghai stocks last summer that shook global markets. Beijing’s attempts to stem the slide included introducing a circuit-breaker mechanism at the start of this year. The new system was scrapped after just four trading days when shares continued to slump. The head of China’s market regulator resigned in February.

Such missteps have deepened skepticism about Beijing’s desire to develop truly free markets. Recently, the existing Shanghai-Hong Kong trading link has been used more heavily by Chinese investors wanting to buy shares in Hong Kong.

“Last year’s stock market rout and bungled policy response have hurt overseas demand for mainland stocks—foreigners have been net sellers of Chinese equities in recent months,” Julian Evans-Pritchard, China economist at Capital Economics in London, said in a note.

The Shenzhen market opened in 1990, when the city was spearheading some of the country’s most far-reaching economic overhauls.

Today, trading remains volatile, driven by retail investors and subject to heavy government intervention. Shenzhen lost 50.2% of its value from peak to trough from last June to September, compared with the 45.1% slump in Shanghai stocks during roughly the same period. Both markets are down about 12% year to date.

Investors have been anticipating the opening of the Shenzhen-Hong Kong Connect for nearly two years, since the earlier Shanghai-Hong Kong link started. Traders say the announcement has been delayed because Beijing’s priority has been to stabilize domestic stock markets.

“Considering the number of fires they’ve had to put out this year, it makes sense for authorities to try to do this in a methodical way,” said Bill Bowler, an equities trader at Hong Kong-based Forsyth Barr Asia Ltd.

Among the well-known companies listed in Shenzhen are telecoms equipment manufacturer ZTE Corp.; China Vanke, the country’s biggest residential real-estate developer; and TCL Corp., a consumer electronics company that bought the Palm brand from Hewlett-Packard Co. in 2015.

However, few expect to see an immediate influx into Chinese markets. Many foreign investors have become skeptical of China due to the recent disappointing flow of economic data and lack of structural reforms the government had pledged. As of early August, China-focused stock funds have posted outflows of nine consecutive weeks, making it one of the worst performing emerging markets, according to EPFR Global.

This addition access to the Chinese market “is not going to have any impact on the fundamentals of Chinese companies, which continue to be quite poor,” said Andrey Kutuzov, an associate portfolio manager at Wasatch Advisors, a Utah-based asset manager specialized in emerging markets. He said that earnings growth in China still lags behind markets such as India, Mexico and the Philippines.

But for some investors, the opening up of the Shenzhen market allows them to invest in the parts of a Chinese economy that are set to benefit from slower industrial and manufacturing growth. Nearly three quarters of Shenzhen-listed companies are in the “new economy” sectors, including service and technology, according to David Semple, who runs the $1.1-billion VanEck Emerging Markets fund. “There’re a handful of stocks that we have identified that are interesting,” he said.

—Carolyn Cui, Yifan Xie
and Dominique Fong contributed to this article.

Write to Gregor Stuart Hunter at gregor.hunter@wsj.com and Chao Deng at Chao.Deng@wsj.com

 

5 Things on the Shenzhen-Hong Kong Stock Connect Plan
Stock-trading link will unlock access to a new territory of Chinese tech shares
ENLARGE
The Shenzhen Stock Exchange has 1,790 listed companies, more than the 1,110 listings in Shanghai. PHOTO: BLOOMBERG NEWS
By DOMINIQUE FONG and GREGOR STUART HUNTER
Aug. 16, 2016 7:17 a.m. ET
0 COMMENTS
A stock trading link between Shenzhen and Hong Kong will unlock access to a new territory of Chinese tech stocks that global investors can’t easily get anywhere else.

ENLARGE
The link gives investors another trading channel to the world’s seventh-largest stock market. As of May, the Shenzhen Stock Exchange had a market capitalization of $3.16 trillion, according to the World Federation of Exchanges. That’s a bit larger than Hong Kong’s $3.10 trillion exchange, but smaller than Shanghai’s $3.87 trillion.

Shenzhen has 1,790 listed companies, more than the 1,110 listings in Shanghai. That compares to the 2,330 companies with shares listed on the New York Stock Exchange as of May, according to the WFE.

ENLARGE
Some fund managers are hoping to buy into one of China’s hottest sectors: tech stocks. Nearly a fifth of Shenzhen’s stock market is tech companies, a much bigger proportion than that in Shanghai, where tech stocks make up just 4% of the market.

Chinese officials, such as Premier Li Keqiang, have stated that tech companies’ continued growth will help shift China’s economy from one led by debt-fueled investment spending—that had bolstered “old economy” state-owned companies in sectors such as steel and cement—to one driven by consumption and the burgeoning middle class.

ENLARGE
The Shenzhen Stock Exchange is the second-busiest world-wide, eclipsing even the Nasdaq and Bats Global Markets in the U.S.
In Shenzhen, the value of share trading was $1.2 trillion during July. That compares to the $1.27 trillion exchanging hands on the New York Stock Exchange and $713 billion trading in Shanghai during the month. High volumes mean there is ample liquidity, making it easier for investors to make the trades at the prices they want.

ENLARGE
Shenzhen is also a volatile market, which mirrored the astounding surge and tumble last year in the Shanghai Composite Index.

Retail investors dominate China’s stock markets, unlike more developed exchanges in Hong Kong and the U.S., where institutional investors comprise a much larger proportion of the market. Because long-term investors, such as pension funds, put in large buy and sell orders, they tend to take more time to react to news and are a stabilizing force in markets. Mom and pop investors in China, on the other hand, tend to be more sensitive to speculation, which can cause large swings in mainland stock markets.

The Shanghai-Hong Kong Stock Connect, which is what the Shenzhen trading link is being modeled after, has seen mixed activity from investors on both sides of the mainland China border.

Mainland Chinese investors have been far more active than global investors through the trading link. Since the Stock Connect’s inception in November 2014, mainland Chinese have bought 81.92% of their aggregate quota of 250 billion yuan allowed by Chinese regulators. On the other hand, global investors have used just 50.09% of their total quota of 300 billion yuan.

The relatively lackluster demand by global investors for Chinese stocks listed in Shanghai so far has raised questions about the success of the program, and whether foreign demand for Shenzhen stocks would be any greater.

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Write to Dominique Fong at Dominique.Fong@wsj.com and Gregor Stuart Hunter at gregor.hunter@wsj.com

 

5 Things on the Shenzhen-Hong Kong Stock Connect Plan
Stock-trading link will unlock access to a new territory of Chinese tech shares

The Shenzhen Stock Exchange has 1,790 listed companies, more than the 1,110 listings in Shanghai. PHOTO: BLOOMBERG NEWS
By DOMINIQUE FONG and GREGOR STUART HUNTER
Aug. 16, 2016 7:17 a.m. ET
0 COMMENTS
A stock trading link between Shenzhen and Hong Kong will unlock access to a new territory of Chinese tech stocks that global investors can’t easily get anywhere else.

ENLARGE
The link gives investors another trading channel to the world’s seventh-largest stock market. As of May, the Shenzhen Stock Exchange had a market capitalization of $3.16 trillion, according to the World Federation of Exchanges. That’s a bit larger than Hong Kong’s $3.10 trillion exchange, but smaller than Shanghai’s $3.87 trillion.

Shenzhen has 1,790 listed companies, more than the 1,110 listings in Shanghai. That compares to the 2,330 companies with shares listed on the New York Stock Exchange as of May, according to the WFE.

ENLARGE
Some fund managers are hoping to buy into one of China’s hottest sectors: tech stocks. Nearly a fifth of Shenzhen’s stock market is tech companies, a much bigger proportion than that in Shanghai, where tech stocks make up just 4% of the market.

Chinese officials, such as Premier Li Keqiang, have stated that tech companies’ continued growth will help shift China’s economy from one led by debt-fueled investment spending—that had bolstered “old economy” state-owned companies in sectors such as steel and cement—to one driven by consumption and the burgeoning middle class.

ENLARGE
The Shenzhen Stock Exchange is the second-busiest world-wide, eclipsing even the Nasdaq and Bats Global Markets in the U.S.
In Shenzhen, the value of share trading was $1.2 trillion during July. That compares to the $1.27 trillion exchanging hands on the New York Stock Exchange and $713 billion trading in Shanghai during the month. High volumes mean there is ample liquidity, making it easier for investors to make the trades at the prices they want.

ENLARGE
Shenzhen is also a volatile market, which mirrored the astounding surge and tumble last year in the Shanghai Composite Index.

Retail investors dominate China’s stock markets, unlike more developed exchanges in Hong Kong and the U.S., where institutional investors comprise a much larger proportion of the market. Because long-term investors, such as pension funds, put in large buy and sell orders, they tend to take more time to react to news and are a stabilizing force in markets. Mom and pop investors in China, on the other hand, tend to be more sensitive to speculation, which can cause large swings in mainland stock markets.

The Shanghai-Hong Kong Stock Connect, which is what the Shenzhen trading link is being modeled after, has seen mixed activity from investors on both sides of the mainland China border.

Mainland Chinese investors have been far more active than global investors through the trading link. Since the Stock Connect’s inception in November 2014, mainland Chinese have bought 81.92% of their aggregate quota of 250 billion yuan allowed by Chinese regulators. On the other hand, global investors have used just 50.09% of their total quota of 300 billion yuan.

The relatively lackluster demand by global investors for Chinese stocks listed in Shanghai so far has raised questions about the success of the program, and whether foreign demand for Shenzhen stocks would be any greater.

Advertisement

Write to Dominique Fong at Dominique.Fong@wsj.com and Gregor Stuart Hunter at gregor.hunter@wsj.com

 

FT:China’s State Council approves Shenzhen-HK market linkup

http://www.ft.com/fastft/2016/08/16/chinas-state-council-approves-shenzhen-hk-market-linkup/

Beijing has just signalled that a long-awaited trading link between Shenzhen stocks and Hong Kong’s market is set to open before the end of the year – roughly two years on from the milestone launch of a link with Shanghai.


The so-called “Connect” will for the first time allow international investors to trade stocks listed in the southern city, home to many more tech and start-up enterprises than Shanghai, which is known for hosting a greater proportion of state-owned enterprises and banks – neither of which are particularly popular with international investors just now.

“Preparatory work related to the Shenzhen-Hong Kong Stock connect is basically completed, and the State Council has approved a ‘Draft Plan for Implementation of the Shenzhen-Hong Kong Stock Connect’,” Premier Li Keqiang said in a statement.

The Shenzhen link has long been expected by the market, with Hong Kong regulators and the exchange saying they are ready. Final testing and preparatory work is expected to take roughly another three months. That would allow the link to open as soon as November.

China economist Chen Long at Gavekal Dragonomics said “appetite will only be gradual” for Shenzhen shares, pointing out that, by his estimate, only half of the Shanghai Connect’s quota had been used in the more than two years since its launch. But he added that investor appetite would be better than it has been for Shanghai because Shenzhen’s small-caps have historically given better returns.

Hao Hong, chief strategist and co-head of research at Bocom International, noted the latest statement was short on key specifics. “Hopefully we’ll see more details in the coming days regarding the quota, daily limits, who can participate, etcetera,” he said.

Mr Hong said the linkup was another significant step in connecting three exchanges from two parts of China, but cautioned that “short term, there could be profit taking based on the news once all the details come out.”

Hong Kong stocks have rallied in recent days in hope that an announcement was imminent. The Shanghai Connect works in both directions, providing mainland investors with their only direct access to an international market as well as allowing foreign money to flow north.

Both southbound and northbound flows are subject to quota caps, but neither requires individual approval of each investor, as previous investor schemes, such as QFII, have.

“[The Shenzhen-Hong Kong connect] has two positives: the first is it shows that this period of worry in Beijing about currency outflows has passed,” said Erwin Sanft, a regional strategist at Macquarie. “But in a more practical way, it opens up increased access to the China market.”

In the official statement Mr Li said the Shanghai-Hong Kong connect had “successfully laid the foundation for the rolling out of the Shenzhen-Hong Kong connect, signifying that China’s capital market has once more taken a substantial step forward in terms of legalisation, marketisation and internationalisation with many positive implications.”

As of market close the Shenzhen Composite Index’s market capitalisation stood at $3.33tn.

(Charts: Macquarie.)