New index to track share gap
3 July 2007
A planned new index would give investors the ability to track price gaps between shares traded both in Hong Kong and Shanghai, the Financial Times reported. To date, there is no real-time tracking mechanism but HSI Services, which compiles the Hang Seng Index, plans to launch the Hang Seng China AH Premium Index this month, with a measure of 100 indicating no price difference. Some 45 companies are listed on both exchanges, usually with different valuations on each. Yuan-denominated A-shares in Shanghai often trade at a 40% premium over Hong Kong H-shares. The price difference between shares on the two bourses can be partially attributed to capital controls and the different perspectives of investors in the two markets.
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