China To End Live Feed On Gauge Of Foreign Flows Into Stocks
Live trading data for flows from Hong Kong into Shanghai and Shenzhen via the connect programs will no longer be available in about a month.
(Bloomberg) -- China will soon cease displaying real-time data for flows into the world’s second-largest stock market through Hong Kong, shielding a closely-watched indicator of foreign sentiment.
Live trading data for flows from Hong Kong into Shanghai and Shenzhen via the connect programs will no longer be available in about a month, according to statements by the two mainland stock exchanges late Friday. Instead, they will provide the turnover details after the daily session.
The changes are to align Chinese practices with other global exchanges, the two bourses said. “There is no intraday real-time data on the trading of a certain group of investors in European, US and other developed markets, nor do those markets distinguish between local and international investors in data disclosure,” they said.
Still, the move may mark another attempt by Chinese policymakers to prop up a market that had suffered from both a loss of retail confidence and the withdrawal of foreign money managers over the past year. Selling by global funds was seen as exacerbating pessimism during the rout, with some participants calling last year for the authorities to obscure intraday flows figures.
“Investors are set to end up with one less window into watching the market, and it will take some time to adjust to,” said Yan Kaiwen, analyst at China Fortune Securities Co.. “But this is another way via which regulators are guiding investment focusing on the longer term.”
Looking across the region, Taiwan’s bourse publishes foreign stock flow numbers once a day. South Korea though discloses the data in real time and on a more granular level.
Other data such as purchases of exchange-traded funds and details on the top 10 most-traded stocks will be shown after the session, unchanged from the current disclosure rules.
The exchanges said they will publish real-time quota remainder data only when more than 70% of the daily amount is used up. The northbound connect programs allow for daily flows of 104 billion yuan ($14 billion), and less than 10% of the quota was used up in Shanghai and Shenzhen on Friday.
Earlier in the year, the intraday data was also analyzed by market watchers for signs of potential intervention by state-backed funds based in Hong Kong. The so-called National Team, including sovereign wealth fund Central Huijin Investment Ltd., had bought around $50 billion of the nation’s equities in the five months through mid-March, according to an analysis by Bloomberg Intelligence.
Link to: China’s National Team Cools ETF Buying After $50 Billion Spree
Foreigner ownership of individual companies via the trading links will no longer be updated daily. Instead, the data will be released five trading sessions after the end of the quarter.
Mainland investors’ holdings of Hong Kong stocks will continue to be issued daily, the exchanges said.
Bloomberg calculates net flows via the trading links on an intraday basis based on buy and sell turnover released in real time by the exchanges.
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