China Approves Trading Link For Shenzhen, HK Stocks
Fahad Shabbir (@FahadShabbir) Published August 16, 2016 | 08:27 PM
SHANGHAI, (APP - UrduPoint / Pakistan Point News - 16th August, 2016) - China's central government has approved plans to link trading between the Shenzhen stock exchange and the Hong Kong market, it said Tuesday, 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' time, 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. Mainland 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 -- or cabinet -- has given its high-level blessing to the scheme, it said in a statement on its website Tuesday. "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 chairman C.K.Chow said the link-up would "open up another mainland market for international investors and strengthen the mainland's links with Hong Kong" in a statement late Tuesday.
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 towards financial reforms, said economist Aidan Yao of Axa Investment Managers.
Yao said it was "an efficient way of liberalising the onshore financial market". A report from Macquarie Securities said the launch would provide international investors access to China's "most dynamic equity market". Chinese stocks surged on Monday in anticipation of movement on the proposal, though the benchmark Shanghai index fell back on Tuesday as investors took profits. Still, the news could offer support for Chinese shares on Wednesday, Zhang Qun, Beijing-based analyst at Citic Securities, told AFP. "It will not affect the market significantly.
Some shares related to Shenzhen-Hong Kong Stock Connect will probably open higher tomorrow morning," he said. The China Securities Regulatory Commission (CSRC), the stock market watchdog, said on Friday that the programme 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. Premier Li said the Shenzhen link would represent a "firm step ahead" as he pledged closer cooperation between mainland China and Hong Kong.
Related Topics
Recent Stories
ICC Womens T20 World Cup Qualifier, Match 2: Ireland Women open with Comfortable ..
Robinson, bowlers help New Zealand go 2-1 up against Pakistan
Shahzeb Chachar to hold khuli kachehri on April 26
Heatwave amid Israel's aggression in Gaza brings new misery, disease risk
Tourism must change, mayor says as Venice launches entry fee
Court adjourns Judicial Complex attack case till May 17
Nasreen Noori’s book ‘Popatan Jahra Khwab’ launched
Wafaqi Mohtasib inspection team visits Excise and taxation office
AJLAC announces 5th Conference titled ‘People’s Mandate: Safeguarding Civil ..
Pak-US officials engage to enhance trade, investment ties
IBCC to promote educational excellence, expand regional presence
Pakistani 'Blue Helmets' serving UN Peacekeeping Mission in DR Congo set to leav ..
More Stories From World
-
Slot 'confident' of Liverpool job as 'negotiations' take place
5 hours ago -
Google parent Alphabet's Q1 profits beat estimates: company
6 hours ago -
WADA asks 'independent prosecutor' to examine Chinese swimmers case
6 hours ago -
New York court overturns Harvey Weinstein sex crime conviction
6 hours ago -
Bagnaia and Spanish rivals chase victory at Jerez
7 hours ago -
Russian, Ukrainian strikes kill at least 10 in frontline regions
8 hours ago
-
Heatwave amid Israel's aggression in Gaza brings new misery, disease risk
8 hours ago -
Tourism must change, mayor says as Venice launches entry fee
8 hours ago -
Pakistani 'Blue Helmets' serving UN Peacekeeping Mission in DR Congo set to leave after 20 years of ..
9 hours ago -
Putin says plans to visit China in May
9 hours ago -
US reinstates open internet rules rescinded under Trump
9 hours ago -
Honda announces US$11 bn EV battery and vehicle plant in Canada
9 hours ago