The Shenzhen Composite has overtaken India's stock market to become the best regional performer of 2014, rising 40 per cent this year.
China's stock markets have been been rallying hard for three weeks now. Previously this might not have mattered - the market is opaque and has been hard for foreigners to access. But since Nov 17 international investors have been able to buy mainland stocks through the Shanghai-Hong Kong Connect scheme. There are hopes that this scheme may be extended to include Shenzhen, whose market capitalisation is around half that of Shanghai, writes Lucy Colback, Lex columnist in Hong Kong.
Potential northbound investment from Hong Kong may thus be one reason behind Shenzhen's rally. A more obvious driver is monetary loosening: the People's Bank of China lowered interest rates on Nov 21. A third impetus comes from expectations of further liquidity stimulus from Beijing.