New link to Shen­zhen is al­most ready

Com­bi­na­tion with HK and Shang­hai to cre­ate in­te­grated mar­ket join­ing up in­vestors

China Daily (USA) - - BUSINESS - By LUOWEITENG in Hong Kong sophia@chi­nadai­lyhk.com

Con­nec­tiv­ity test­ing and mar­ket re­hearsals to ver­ify the tech­ni­cal readi­ness for the soon-to-be-launched stock trad­ing link be­tween Shen­zhen and Hong Kong were com­pleted over the week­end, mark­ing al­most the fi­nal step in a pro­longed process ex­pected to pave the way for the sec­ond cross-bor­der stock “through train”.

The of­fi­cial roll­out is pro­jected to come in mid-Novem­ber, nearly two years af­ter the mile­stone launch of a link with Shang­hai. Hong Kong Ex­changes and Clear­ing (HKEx) chief ex­ec­u­tive of­fi­cer Charles Li Xiao­jia said pre­vi­ously that it will take roughly two weeks to for­mally kick off the stock con­nect af­ter the com­ple­tion of fi­nal test­ing and prepara­tory work.

Some 144 Hong Kong-based bro­ker­age firms re­port­edly joined the north­bound trad­ing mar­ket re­hearsal, 11 more than the cur­rent par­tic­i­pants in the Shang­hai-Hong Kong Stock Con­nect, while 97 main­land bro­kers par­tic­i­pated in the south­bound trad­ing re­hearsal.

For the very first time, in­ter­na­tional in­vestors will have an easy ac­cess to trad­ing stocks listed in the south­ern coastal me­trop­o­lis. The fish­ing vil­lage­s­tands as the poster child of China’s “new econ­omy” and is al­ready hometo a wealth of tech en­ter­prises and star­tups, many more than Shang­hai.

The abol­ish­ment of the over­all quota limits on the Shen­zhen-Hong Kong Stock Con­nect, in par­tic­u­lar, comes as the big­gest highlight, Chief China Econ­o­mist of HKEx Ba Shu­song told the third Dameisha China In­no­va­tion Forum in­Shen­zhen­over the­week­end.

In terms of trad­ing and clear­ing mech­a­nisms, the up­com­ing link with Shen­zhen is viewed as an ex­ten­sion of the link with Shang­hai.” chief China econ­o­mist of HKEx

Ba Shu­song,

“In terms of trad­ing and clear­ing mech­a­nisms, the up­com­ing link with Shen­zhen is viewed as an ex­ten­sion of the link with Shang­hai,” said Ba. “But the point is, with the ag­gre­gate quota scrapped, stock ex­changes in Shang­hai, Shen­zhen and Hong Kong are linked to­gether into a com­mu­nity, with the com­bined mar­ket cap­i­tal­iza­tion amount­ing to 70 tril­lion yuan ($10 tril­lion), and al­most equal to that of the New York Stock Ex­change. This tremen­dously beefs up the in­vestor base.”

Hong Kong stocks closed higher on Mon­day at 22,801.40, up 0.7 per­cent.

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