Shenzhen-Hong Kong Stock Connect is a big event in capital market this year. Recently, the shenzhen stock exchange has released regulations such as Implementation of the shenzhen-HK stock connect business, which means the system of the shenzhen-HK stock connect business has been founded. What will happen when the shenzhen-HK stock connect business put into practice? How many investment opportunities it will bring? Which risks we should be careful of? A large number if investors who are ready for the shenzhen-HK stock connect business are supposed to do ample work for benefiting form it.

Capital flow is mainly influenced by expectation. Apart from valuation differences, it is the relative performance from A shares and H shares that matters. The opening of the shenzhen-HK stock connect business is a bridge between shenzhen and HK markets which are independented from each other.,and then, money can circulated more freely. So investors are concerned about what the situation of capital will be when the shenzhen-HK stock connect business opens.

Since the news released in April this year, H shares perform well meanwhile A shares stay the same. Some suggest that H shares are more attractive for money owing to they are underestimated. They believe that money will flow to the south. Others worry about the R/E ratio of the gem is at a high level. the shenzhen-HK stock connect business will put the gem under pressure.

At the early time, money flows more to the North rather than the South until to March, 2015. from April to October,2015, the flows is in balance for the regulation issued by China securities regulatory commission about Public funds participating in H shares.

In the late 2015, more money goes to the South rather than the North. And then shanghai shares manifest well and money flows closely. For the changes, professor tian analyses that Capital flow is mainly influenced by expectation. in multi-markets investment, expectation of micro enterprises can be impacted by macro economy. As a emerging market, A shares performs well so money flow from the south to north. However, A shares and the currency market fluctuate severely last year, which lead to changes of expectation, as is the reason of the changes of money flow. Since this year, the stock market and currency market do well, so the money flow go into a balance.

Professor tian believes, in the short run,the opening of the shenzhen-HK stock connect business has little influence on A shares on the premise that the domestic and international economy goes smoothly. And in the long run,it can reduce the price differences of A shares and H shares.In fact, it can develop international impact of listed company in shenzhen stock exchange. Moreover it supplied another channel to invest abroad.