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'Ghost train' haunts HK-Shanghai Stock Connect

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The highly-anticipated Shanghai-Hong Kong Stock Connect met a lackluster response during its first week, but strategists aren't writing off the program yet as the so-called "through train's" engine is just warming up.

The cross-border trading scheme filled 36 percent of its "northbound" quota and just 6 percent of its "southbound" quota last week, according to Reorient Research, which characterized the launch week as a "bust."

Under the program, mainland stock purchases are capped at 13 billion yuan a day. Buying of Hong Kong stocks is limited to 10.5 billion yuan daily.

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"Towards the end of the week, people saw that quotas were being used less and less, and lost interest. On top of this, stock markets were under pressure, so people weren't keen to jump in," Steve Wang, research director and chief China economist at Reorient Group told CNBC on Monday.

Learning curve

Investor caution was another factor behind the low take-up, with many still familiarizing themselves with the new trading system.

On top of this, investment firms in Hong Kong and China are still building teams for A-share and H-share research, respectively. This process will take several months, said Wang.

"Many investors we spoke to were not expecting the launch to come so soon," he said. "Some said they hadn't done their homework, and others didn't have the resources to do stock research."

Still positive

Despite these hurdles, strategists remain positive on the trading link's potential.

China's latest rate cut could be a fresh catalyst for investors to jump on board the through train, said Wang.

Read MoreStocks surge as China central bank cuts rates

In a surprise move on Friday, the People's Bank of China (PBoC) cut interest rates for the first time in over two years, stepping up efforts to support the world's second-biggest economy as it heads toward its slowest expansion in nearly a quarter of a century.

The central bank reduced the 12-month benchmark lending rate by 0.40 percentage points to 5.6 percent and the 12-month benchmark deposit rate by 0.25 percentage points to 2.75 percent.

'Give it time'

Stephen Sheung, head of investment strategy at SHK Private was not discouraged by low turnover in the first week either.

"It's going to take time. People are monitoring trading patterns and how the scheme changes the market dynamics in Hong Kong and Shanghai," he said.

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He expects usage of the quota will increase in the coming weeks.

"Markets are getting hotter with the PBoC rate cut, and we have the Economic Work Conference coming up. They will be positive for the market," he added.

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China's Economic Work Conference, held in December, will map out economic and reform plans for the coming year.

If the take-up doesn't improve in the next 3-4 weeks, both exchanges would need to do more in terms of investor education and marketing, Sheung said.

"Mainland investor knowledge in Hong Kong shares isn't that great," Sheung added. "Retail investors are the dominant bunch in China, so it will take more time to educate them. In Hong Kong we have a lot of institutional investors going north, which explains the difference in utilization rates."