THE valuation difference between mainland shares traded in Hong Kong and Shanghai narrowed to the smallest in three months after brokerages said the first full trial of the cities’ exchange link went smoothly.

    The Hang Seng China AH Premium Index of dual-listed companies rose 0.6 percent to 93.63 yesterday morning, signaling a narrower discount on mainland shares. First Shanghai Financial Holding Ltd. successfully completed more than 200 mock trades, said Eliot Li, a director at the Hong Kong-based brokerage. Haitong Securities Co. will be ready if the link starts as planned in October, said Zhuang Wei, a vice general manager at the Shanghai brokerage.

    “The market rehearsal went quite smoothly,” said Li, the director of corporate development, sales and marketing at First Shanghai. “I am quite optimistic about the program in October. I think we will be ready.”

    Forecasters from Morgan Stanley to Robeco have predicted the exchange link will help reduce gaps between dual-listed shares by making it easier for arbitragers to move money between the two markets.

    The connect, which allows a net 23.5 billion yuan (US$3.8 billion) in daily purchases between Asia’s biggest stock markets after Japan, offers a new route for international buyers to access Chinese mainland stocks and for mainland investors to put money into Hong Kong equities.

    (SD-Agencies)