Business / Markets

Vital link to the future

By Xie Yu in Hong Kong (China Daily) Updated: 2014-11-11 09:25

The Shanghai-Hong Kong Stock Connect will have a broad impact on the Hong Kong and mainland equity markets.

Much discussion and debate has centered on the opportunities the program will offer investors. Some believe it will provide a long-sought gateway to opportunities in the A-share market that have been closed to offshore investors. Others contend that the mainland market's practices and regulations will deter offshore institutional investors.

But it seems that there will be no shortage of investors eager to test the waters. All three seminars for local investors held by the Stock Exchange of Hong Kong last month were fully booked, and brokerages are working to attract clients and develop new investment products for the program.

Charles Li, chief executive of Hong Kong Exchanges and Clearing Ltd, which runs the city's exchange, said the through train project "is not perfect but, considering the magnitude of the program and what it represents in terms of advancing the mainland's financial market opening and enhancing Hong Kong's role as a global financial hub, I believe it is important to move forward rather than let such an important opportunity pass by."

The connection, which is expected to facilitate the equivalent of $3.8 billion a day in cross-border transactions, had originally been scheduled to start last month, but it was unexpectedly delayed as protesters continued to shut down sections of Hong Kong.

The Hong Kong Securities and Futures Commission and the China Securities Regulatory Commission jointly announced on Monday that the launch of Shanghai-Hong Kong Stock Connect on Nov 17 has been approved, said a statement.

The program is expected to push up volumes on both exchanges, particularly Shanghai, but it is subject to strict limits in light of capital controls in the mainland.

Vital link to the future
Vital link to the future
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