It is not good to reduce holdings on the Shanghai Stock Connect. The Shanghai Stock Connect is a channel for Hong Kong to buy stocks on the Shanghai stock market. The reduction of holdings on the Shanghai Stock Connect means that a large number of sell orders will be generated and a large amount of funds will flow out of the stock. The amount of funds will affect the rise of the stock. One of the factors for the decline, so it is not good to reduce holdings on the Shanghai Stock Connect.
Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect are collectively referred to as northbound funds. Northbound funds are relatively sensitive to market and industry prosperity. Northbound capital inflows have a stimulating effect on domestic stocks, while capital outflows have a negative effect on stocks.
