At midday, the Hang Seng Index was up 0.5 per cent at 23,703.3 points and up 2.9 per cent for the week, but just shy of the year’s intra-day highs at 23,944.7. The China Enterprises Index of the top Chinese listings in Hong Kong climbed 1.2 per cent.

Gains for the H-share index were again limited by technical resistance at March highs, but it is now up 7.2 per cent this week, its biggest since early December 2011 and a drastic outperformance over its onshore peers.

The Shanghai Composite Index was down 0.2 per cent by midday and the CSI300 of the leading Shanghai and Shenzhen A-share listings off 0.1 per cent. But the indexes are set for their best weekly showing in two months, up 3.1 and 2.5 per cent, respectively.

That has left the Hang Seng China A-H Premium Index at its lowest since October 2010, suggesting H-shares are now trading at its biggest premium over A-shares in more than three years.

“The two markets are quite different at the moment, primarily because of their different liquidity conditions,” said Hong Hao, chief equity strategist at Bank of Communications International.

Hong was referring to the tighter conditions in the mainland, where markets remained largely closed, as cash rates have risen this week despite the central bank’s largest cash injection in nearly two months. On the other hand, global funds are now reallocating money to offshore Chinese markets.

“But trading wise, I don’t think investors should take on any more risk after the big rally earlier this week,” he added.

On Friday, Chinese brokerages stretched weekly gains, boosted by a report in the official China Securities Journal that foreign investors may be allowed to increase stakes. Draft plans submitted for approval on the expansion of the sector aims to “grow the industry by 10 times in the next 10 years,” the same report said.

Citic Securities , the country’s largest listed brokerage, jumped 2.9 per cent in Hong Kong and 2.1 per cent in Shanghai. This week, Citic shares have surged 19 per cent in Hong Kong and 12 per cent in Shanghai.

  Chinese insurers were buoyed by a report in the official Shanghai Securities News that regulatory data showed insurance premiums jumped 11.6 per cent in the first 10 months this year from a year ago. CPIC jumped 4.1 per cent in Hong Kong.