China Is Said to Push for Arbitrage Cap on Shanghai-London Stock Link

The video discusses the Hong Kong and London Stock Connect programs, focusing on China's incremental reforms to open capital markets. A key issue is the fungibility of shares traded on both markets, which allows swapping shares between Shanghai and London. China is concerned about capital control circumvention and is considering introducing controls, which could deter investors. The debate continues between market participants and Chinese authorities on whether to allow full fungibility.

What is the primary goal of China's stock connect programs?

• To increase domestic investment

• To stabilize the currency

• To open up capital markets

• To restrict foreign investment

What is the main concern for China regarding the fungibility of shares?

• Devaluation of the yuan

• Increased foreign investment

• Circumventing capital controls

• Loss of market share

What might China introduce to address the risks of share swapping?

• Higher taxes on foreign shares

• Increased interest rates

• More stock connect programs

• Controls on share swapping

How might investors react to potential controls on share swapping?

• Ignore the changes

• Welcome the controls

• Seek alternative markets

• Increase their investments

What do investors desire in terms of share fungibility?

• Higher transaction fees

• Limited exchange options

• Complete control by Chinese authorities

• A fully fungible situation