Nod for Shen­zhen and HK trad­ing link

The Myanmar Times - - International Business -

CHINA'S cen­tral gov­ern­ment has ap­proved plans to link trad­ing be­tween the Shen­zhen stock ex­change and the Hong Kong mar­ket, paving the way for the long-awaited re­form.

The Hong Kong stock ex­change said it ex­pected prepa­ra­tions for the launch of the mech­a­nism to be fin­ished in four months, but that a start date would be sub­ject to reg­u­la­tory ap­proval.

China launched a landmark “stock con­nect” be­tween the bourses of Shang­hai and its spe­cial ad­min­is­tra­tive re­gion of Hong Kong in late 2014, open­ing up its clos­eted share mar­ket to the out­side world and giv­ing for­eign in­vestors ac­cess to Chi­nese com­pa­nies not quoted else­where.

China's sec­ond stock ex­change, in the south­ern city of Shen­zhen, was due to fol­low last year, but the launch was de­layed by a mar­ket rout.

The pow­er­ful State Coun­cil has given its high-level bless­ing to the scheme, it said in a state­ment.

“The State Coun­cil has ap­proved the im­ple­men­ta­tion pro­posal for the Shen­zhen-Hong Kong Con­nect,” Premier Li Ke­qiang was quoted as telling a meet­ing of the body.

He added prepa­ra­tion work was “ba­si­cally com­pleted” but gave no date for the launch.

Hong Kong ex­change chair CK Chow said the link-up would “open up an­other main­land mar­ket for in­ter­na­tional in­vestors and strengthen the main­land’s links with Hong Kong”.

The ex­change’s chief ex­ec­u­tive Charles Li said one of the aims was to build Hong Kong into an off­shore wealth man­age­ment cen­tre for main­land in­vestors.

The move demon­strates the “con­tin­u­ous com­mit­ment” of the Chi­nese gov­ern­ment to­ward fi­nan­cial re­forms, said economist Ai­dan Yao of Axa In­vest­ment Man­agers.

A re­port from Mac­quarie Se­cu­ri­ties said the launch would pro­vide in­ter­na­tional in­vestors ac­cess to China’s “most dy­namic eq­uity mar­ket”.

The China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion (CSRC), the stock mar­ket watch­dog, said the pro­gram will be launched this year, re­peat­ing com­ments a spokesman made in June.

The ex­ist­ing Shang­hai-Hong Kong Stock Con­nect en­ables in­ter­na­tional in­vestors to trade se­lected stocks on Shang­hai’s tightly re­stricted ex­change, and lets main­land in­vestors buy shares in Hong Kong.

Mr Li said the Shen­zhen link would rep­re­sent a “firm step ahead” and pledged closer co­op­er­a­tion be­tween China and Hong Kong. –

Photo: EPA

The Hong Kong Ex­changes and Clear­ing flag flies out­side the stock ex­change.

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