An Analysis On The Impact Of Shenzhen And Hong Kong Stock Connect Program On The Disparity Of Chinese A-share And H-share

With economic globalization,wider application of information technologies in finance,worldwide capital circulation being more free and the territorial limits on financial trading being fuzzier,so many enterprises have been looking for international capital finance.Thus the phenomenon of dual-listing becomes more popular,which can be thoroughly showed on China’s A-and H-shares markets.There exists the law of one price within economic theory.However,in share markets there have been a phenomenon that does not go with this theory,which is one stock with different price.Current researches mostly use market segmentation to explain this phenomenon.As for AH share companies,laws and market background are more tough on H share market than A share market,so investors on A share market will give them a higher valuation.This these employs empirical research,concluding that the opening of Shenzhen and Hong Kong Stock Connect Program has some effects on AH share price difference.Then it analyses the four main factors that affect China’s A share and H share price difference.The results showed that the Shenzhen and Hong Kong Connect Program has certain influence on the disparity of Chinese A-share and H-share.Finally,this thesis advises strengthening risk controlling for Shenzhen and Hong Kong Stock Connect Program and improving information disclosures,raising up its investment amount limits and lowering its threshold;improving the A share investors’ structure and broaden their investment channels.