China approves trading link for Shenzhen, HK stocks

China approves trading link for Shenzhen, HK stocks

Tuesday, August 16, 2016

Print this page Email A Friend!

SHANGHAI, China (AFP) — China’s central government has approved plans to link trading between the Shenzhen stock exchange and the Hong Kong market, it said yesterday, 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 yesterday.

"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 CK 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 yesterday.

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 yesterday as investors took profits.

Still, the news could offer support for Chinese shares on Wednesday, Zhang Qun, Beijing-based analyst at Citic Securities, told

"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.

Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at




1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper � email addresses will not be published.

2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.

3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.

4. Please do not write in block capitals since this makes your comment hard to read.

5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed:

6. If readers wish to report offensive comments, suggest a correction or share a story then please email:

7. Lastly, read our Terms and Conditions and Privacy Policy

comments powered by Disqus



Today's Cartoon

Click image to view full size editorial cartoon