A Shares Will Be More Tired Than Hong Kong Stock 50%.

According to media reports, Hang Seng AH premium index rose 3.04% on Monday, closing at 146.94 points, the highest since September 4, 2015.

This means that the spread of shares listed on the mainland and Hongkong will further expand.

The overall stock price is nearly 50% higher than that of H-shares.

This column believes that the price of A shares and H-shares can not be simply compared horizontally. It is necessary to consider various factors, especially exchange rate factors, and may draw different conclusions.

First look at such a data, in the RMB offshore market, there are two main quotations for RMB spot price and 12 months later. When the RMB exchange rate is 6.4 yuan, 12 months later, the price will be 6.6 yuan, which does not mean that investors expect the RMB exchange rate to change. But according to the current interest rate level, the interest rate of 6.4 yuan in 12 months is 6.6 yuan, while the US dollar is zero interest rate, so 1 dollars per year is still 1 dollars, which is a reasonable explanation for the difference between the two kinds of quotations.

It is precisely because investors expect that the interest rate of the renminbi will still be higher than the Hong Kong dollar, so there is a need for a moderate depreciation of the renminbi. Therefore, it is natural that the renminbi priced shares will be more expensive than the Hong Kong dollar priced shares.

If

Between A and shares, it is allowed to carry out the registration paction, that is, if investors can buy Hongkong stocks and sell them in A shares or sell them in Hongkong after buying A shares, then the share price of A shares and H-shares will be able to achieve the same price. However, because there is no such equilibrium price mechanism in the A share market and Hong Kong stock market, investors will be able to measure the relationship between the two sides based on more factors.

There is still a way to solve this price gap, for example, it can be encouraged.

In the issue of new shares issued by A shares, the funds raised are used to repurchase shares in the Hongkong stock market, so that not only can the listed company get the price difference income, enrich shareholder value, but also make the prices on both sides converge.

Now there are two quotations for the two stocks listed at the same time, one is the renminbi quotations, the other is the Hong Kong dollar quotations.

Because both the Hong Kong dollar and the US dollar are policies of zero interest rate, and the market interest rate of RMB is about 3%. That is to say, after a year, the value of holding RMB will be increased by 3%. The holding of US dollar or Hong Kong dollar has little appreciation. According to the principle of same yield, the exchange rate of RMB will be 3% lower than that of the US dollar in one year. If RMB spreads with the US dollar in the future, the RMB will probably depreciate at a rate of 3% per year.

Then ten years later, the renminbi will depreciate by 30%. At that time, the value of 13 yuan will only be equivalent to the stock price of 10 yuan, that is, the difference between A shares and H shares will be narrowed.