(Yicai Global) Jan. 3 -- Jan. 2 was the first trading day for the stock markets in mainland China and Hong Kong in 2018, and both started the year on the right foot.
Mainland China witnessed significant growth on increased liquidity, while the Hang Seng Index hit a 10-year high.
The Shanghai Composite Index was up 1.24 percent to 3,348.33 as of closing with a transaction volume of CNY227.8 billion (USD35 billion). The Shenzhen Component Index rose 1.25 percent to 11,178.05 with a transaction volume of CNY217.7 billion. The Growth Enterprise Market Index increased 0.97 percent to 1,769.67 with a transaction volume as CNY46.9 billion.
The Hang Seng Index climbed 1.99 percent to 30,515.31. The Hang Seng China Enterprises Index went up 3.07 percent to 12,068.99, and the Hang Seng China-Affiliated Corporation Index rose 1.58 percent to 4,496.19.
On Dec. 29, China's central bank announced it had decided to establish a temporary plan for appropriating reserve funds to meet the temporary liquidity demand that stems from commercial banks' massive cash release ahead of the Spring Festival.
The scheme will free up more than CNY1 trillion, alleviating liquidity pressure during the holiday, analysts said.
To further optimize the financing environment for domestic enterprises going public in overseas markets, and deepen the reform in overseas listing systems, the China Securities Regulatory Commission carried out a pilot program for H-share listed companies to promote share circulation, said CSRC spokesman Chang Depeng at a press conference on Dec. 29.
Central enterprises that listed in recent years adopted the H-share framework, but many of them saw a circulation ratio under 30 percent, which led to a low weight of these H-shares in the Hang Seng Indexes and MSCI Indexes.
The market value, weight and business scale of these enterprises are out of proportion and policy encouraging the circulation of H-shares will help address the problem of mismatches between circulated market values and business scale, driving up fund allocation demand and optimizing their appraisement, said Everbright Securities.