In the market, the flow of funds going northward has always been regarded as the weather vane for investors to judge the market. Among them, Shanghai Stock Connect means that investors entrust the participants of the stock exchange to report to the Shanghai Stock Exchange through the securities trading service company of the stock exchange and buy and sell the stocks listed on the Shanghai Stock Exchange within the prescribed scope.
Shanghai Stock Connect is a part of Shanghai-Hong Kong Stock Connect; Shanghai-Hong Kong Stock Connect, that is, the interconnection mechanism of Shanghai-Hong Kong stock market transactions, refers to the securities trading service companies established by investors in the two places through the Shanghai Stock Exchange or the other stock exchange, and entrusts members of the Shanghai Stock Exchange or exchange participants to buy and sell stocks listed on the other stock exchange within the prescribed scope. Shanghai-Hong Kong Stock Connect includes Shanghai Stock Connect and Hong Kong Stock Connect.
Conceptual origin
The capital of the north corresponds to the capital of the south. The north and south here is not what we usually call the north and south, but refers to Hong Kong. Northbound capital refers to the entry of Hong Kong and international capital into the A-share market, while southbound capital refers to the capital operated by China mainland in Hong Kong stocks. The names of these two funds were formed after the opening of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect in China.
The A-share market does not allow foreign direct participation, and the capital market in this market is controlled and cannot circulate freely.
China's Hong Kong stock market is an international financial center, and many overseas funds can invest in Hong Kong stocks. However, the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect opened in China on 20 14 and 20 16, respectively, which opened the mutual flow of funds in the A-share market and the Hong Kong stock market, because the mainland is in the north of Hong Kong, forming the saying that funds are going north.