China and HK markets Integration...

HK's biggest challenge ahead is how to ensure it benefits from an integrated market with China, says Hang Seng Bank in monthly economic review. Note says when 2 markets effectively operate as one, companies, investors choose the most efficient one with best price, lowest transaction costs. Adds QFII, QDII, CNY bonds, discussion on price equalisation of A-, H-shares are steps towards integrating 2 markets. While arbitrage mechanism in equities market only affect the 45 dually-listed companies, development could be more significant in longer term when more companies are dually-listed, it says .