City limits to be placed on through-train share scheme
17 September 2007
Purchases of Hong Kong stocks by individual mainland investors are likely to be restricted to five designated cities in order to prevent a large capital outflow, the South China Morning Post reported. One source said the regulator was certain to allow the "through-train" cross-border pilot investment scheme to take place in Beijing, Tianjin, Shanghai, Shenzhen and Guangzhou. It is unclear what other cities may be included. Since it was announced on August 20, the scheme - which is intended to drain liquidity from the domestic market - has divided officials. According to one broker, many critics were under the impression that any Chinese from across the country could invest through the Bank of China branches in Tianjin. In fact, the scheme applies only to local investors.
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