Institutional investors will be the key beneficiaries of the Shenzhen-Hong Kong Stock Connect, as they leverage on the gap between share prices on the exchanges, experts said Monday.
The Shenzhen-Hong Kong Stock Connect, which opened on Monday, is similar to the existing Shanghai-Hong Kong Stock Connect, which was launched in late 2014.
Investors in Hong Kong will be able to buy Shenzhen-listed stocks, including many prominent technology and consumer names in the mainland. In return, Chinese investors will have access to shares listed in Hong Kong.
"It's all about China building institutional investment. It's building insurance companies; it's building pension funds; it's building whole structures that we need for long-term investments," said Mark Tinker, who is Head of Framlington Equities Asia at AXA Investment Managers.
With southbound investments from China into Hong Kong previously dominated by individual retail investors, the access and liquidity that the new trading link offers will be positive for institutional investors, he told CNBC's "Squawk Box".
DBS Vickers Securities' director Alexander Lee said the house didn't think the new trading platform will have a big impact on the broad market, but will boost stocks with good fundamentals that now offer greater liquidity.
Goldwind shares in China for instance were trading at a 70 percent premium to their counterpart on Hong Kong with the Hong Kong shares paying out 5 to 6 percent in dividends.
"That should be attractive to insurance or institutional investors seeking yield play," he said.