The valuation gap between dual-listed stocks trading on China’s and Hong Kong’s exchanges has plunged to multi-year lows, as an influx of mainland capital boosts shares in the latter.
The property, health care, and consumer sectors are expected to see the sharpest fall in the spread between their share prices in the two markets in the near future.
The Hang Seng China A-H Premium Index, which measures the premiums of mainland-listed Chinese companies (A shares) over their Hong Kong-listed counterparts (H shares), dropped 0.4 per cent to trade at 118.2 on Tuesday morning. That means A shares enjoy an 18.2 per cent premium over H shares.
The index briefly touched a two-year low of 116.85 last Thursday, down 7 per cent from its recent peak of 125.6 earlier in the month.
