New | Stock connect scheme 'news' sparks Shenzhen and Hong Kong markets, but slowed as it emerged that no timeline set

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Disappointment after Mainland central bank governor's article suggesting action this year is revealed to be old

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Yu Xie,Jing YangandBenjamin Robertson

Published: 10:30am, 4 Nov 2015Updated: 4:56am, 5 Nov 2015

People’s Bank of China governor Zhou Xiaochuan told them the Shenzhen-Hong Kong stock connect scheme would begin “within this year” and that it showed “China was opening up a new channel to connect the global capital markets”. Photo: SCMP Pictures

A report that the Shenzhen-Hong Kong stock connect scheme would be launched this year sparked market rallies in the two cities on Wednesday morning, but the mood turned to disappointment in the afternoon and the Hong Kong rally lost steam when it emerged that the positive “news” was almost six months old.

Just after markets opened on the mainland and in Hong Kong on Wednesday, an article written by People’s Bank of China governor Zhou Xiaochuan that was posted on the central bank’s website fuelled hopes the Shenzhen-Hong Kong stock connect scheme would be launched this year, despite widespread market expectations it would be delayed to 2016 following the stock rout that hit the mainland in June.

The markets surged on the unexpected, positive news. The ChiNext Index, covering mid- and small-cap technology firms, rose 4.43 per cent, or 107.53 points by 11.30am in Shenzhen and then crept up a further 6.38 points in the afternoon to close at 2,584.32. The Shenzhen Composite Index closed the morning session at 2,053.88, up 3.39 per cent, and ended the day up 5.12 per cent at 2,089.29.

The blunder made by PBOC this morning seems more like a genuine, human mistake

Senior finance industry source

In Hong Kong, the benchmark Hang Seng Index was pushed up more than 700 points, or 3 per cent, to 23,308 by 11.30am, but finished the day at 23,053.57, up 2.15 per cent.

However, during the markets’ lunch break, the PBOC inserted a line into Zhou’s article on its official website, explaining that his remarks had been made on May 27, during a “party education” lecture to staff.

Market Talk: Shenzhen-Hong Kong connection months away

He told them the Shenzhen-Hong Kong stock connect scheme would begin “within this year” and that it showed “China was opening up a new channel to connect the global capital markets”.