Personal Finance & Money Asked on August 2, 2021
Foreign investors can invest in Chinese large cap and mid cap stocks via the Shanghai – Hong Kong Stock Connect and the Shenzhen – Hong Kong Stock Connect. According to the Hong Kong Stock Exchange’s Stock Connect FAQ:
For the Shanghai Stock Exchange, foreign investors can use the Stock Connect to buy securities that are part of the SSE 180 Index, SSE 380 Index, and all Shanghai-listed A shares that are also listed on the Hong Kong Stock Exchange.
For the Shenzhen Stock Exchange, foreign investors can use the Stock Connect to buy securities that are part of the SZSE Component Index, the SZSE Small/Mid Cap Innovation Index (above a particular market capitalization), and all Shenzhen-listed A shares that are also listed on the Hong Kong Stock Exchange.
The constituents of the market indexes mentioned above are mostly large cap and mid cap stocks. This means that the Stock Connect scheme is not for small cap stocks. Does this mean that foreigners are not able to buy small cap stocks listed in China? Is there a way for foreigners to buy small cap stocks listed in China?
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