Research On The Linkage Of Shanghai,Hong Kong And London Stock Markets

The joint action of the stock market is an important economic phenomenon that has appeared in different stock markets around the world,so it has become a hot issue for researchers at home and abroad.In recent years,in order to continuously improve the operating environment of China's stock market,the Chinese government has successively launched the Shanghai-Hong Kong stock connect and Shanghai-London stock connect systems,which has gradually merged the mainland stock market from the original closed state into the open stock market.Therefore,under the background of the Shanghai-Hong Kong stock connect and the Shanghai-London stock connect,it is of great significance to study the changes in the stock market linkage between the Shanghai-Hong Kong and London.This article first elaborated on the research background,significance,research ideas,methods and innovations of the paper.Secondly,the relevant theories involved in the thesis are introduced.Thirdly,with the most representative Shanghai composite index,Hang Seng index and FTSE 100 index as the research objects,from the perspective of yield and volatility,to study the changes in the linkage between Shanghai and Hong Kong-London stock markets before and after the Shanghai-Hong Kong stock connect and the Shanghai-London stock connect,respectively,and analyze the research results specifically.Finally,according to the empirical results,the corresponding policy recommendations are put forward.The study found that before the opening of the Shanghai-Hong Kong stock connect,there was a linkage relationship between the stock markets of Shanghai and Hong Kong.After the opening of the Shanghai-Hong Kong stock connect,more and more mainland companies have chosen to list on the Hong Kong stock market,and the capital exchanges between the two places have become more frequent,which has further strengthened the linkage between the stock markets in Shanghai and Hong Kong.After the opening of the Shanghai-London stock connect,the mutual influence between the Shanghai and Hong Kong stock markets gradually deepened,but the main manifestation was the impact of theShanghai stock market on the Hong Kong market.The linkage effect of the Shanghai-London stock market before the opening of the Shanghai-Hong Kong stock connect is not very obvious.Although the opening of the Shanghai-Hong Kong stock connect has increased the influence of the mainland stock market to a certain extent,it is not enough to affect the London stock market.Therefore,the linkage between the stock markets in Shanghai and London is still not very high.The opening of the Shanghai-London stock connect has strengthened the linkage between the stock markets in Shanghai and London to a certain extent.However,due to the restrictions on the entry threshold and differences in investment philosophy,the linkage between the stock markets in Shanghai and London is still very weak.Based on the empirical results of the paper,this article puts forward the corresponding policy suggestions: In the process of making investment decisions,investors should pay close attention to the changes in the linkage between different stock markets and formulate flexible investment strategies;Policy makers should appropriately reduce the Shanghai-London stock connect threshold to enter the market,moderately expand the scope of the Shanghai-London connect investment target,so as to increase the enthusiasm of investors;Financial regulatory authorities need to improve the risk early warning mechanism,and actively establish a reasonable and effective risk treatment mechanism,so as to effectively judge the occurrence of crises and the situation of infection,and timely prevent the outbreak of domestic financial risks and the spread of international crises.