This Dec 2, 2018 photo shows Hong Kong Exchanges and Clearing. (PHOTO / IC)
HONG KONG – Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor has hailed the inclusion of eligible exchange-traded funds in the Stock Connect program as a “milestone”, saying that it will further strengthen Hong Kong's role in connecting financial markets in the mainland and the rest of the world.
The China Securities Regulatory Commission and the Securities and Futures Commission jointly announced on Friday the in-principle agreement to include eligible exchange-traded funds in Stock Connect.
In a statement, the Hong Kong Special Administrative Region government warmly welcomed the decision.
Lam said that the National 14th Five-Year Plan expresses staunch support for enhancing Hong Kong's function as a global offshore renminbi business hub, as well as deepening and widening the mutual access between financial markets of the mainland and Hong Kong.
As the HKSAR marks the 25th anniversary of its establishment this year, CE Carrie Lam said she is "most grateful to the central government for the announcement", which will considerably bolster investors' confidence in the city's market
The implementation of mutual access of ETFs marks another milestone in the continual integration of the two capital markets, she added.
“Various mutual access programs including the Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and Bond Connect have thrived over the past few years,” she said.
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Since the launch of Stock Connect, its northbound trading has brought a net inflow of over 1,600 billion yuan to the mainland stock market. Its southbound trading has brought a net inflow of over HK$2,300 billion to the Hong Kong stock market.
“The amount of foreign holding of mainland onshore bonds has reached over 3,700 billion yuan through Bond Connect and other channels,” Lam noted.
As the HKSAR marks the 25th anniversary of its establishment this year, Lam said she is "most grateful to the central government for the announcement", which will considerably bolster investors' confidence in the city's market.
“We will continue to capitalize on Hong Kong's unique advantages under ‘one country, two systems’ as well as further consolidate and enhance its status as an international financial center,” she added.
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“Looking ahead, Hong Kong will better integrate into the overall national development and play a part in the development strategy and real economy of our country in pursuit of high-quality opening up.”
Hong Kong’s Financial Secretary Paul Chan Mo-po said the HKSAR government has all along strived to expand the scope of mutual access of financial markets in Hong Kong and the mainland.
Hong Kong’s Financial Secretary Paul Chan said the “ETF Connect” will further deepen the interaction and integration of the two capital markets
He pointed out that “ETF Connect” will further deepen the interaction and integration of the two capital markets. It will offer more diverse asset allocation choices to mainland and overseas investors, and promote liquidity as well as sustainable development of ETF markets in the two places, he added.
The finance chief asserted that the initiative also promotes the further opening up of the mainland financial market, consolidates Hong Kong's role as the gateway and the bridge for flows of international and mainland capital.
“I would like to express my gratitude to the Central People's Government and relevant authorities for their strong support, and the financial institutions in the mainland and Hong Kong for their efforts in implementing the program,” Chan added.
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The stock exchanges in Shanghai, Shenzhen and Hong Kong as well as the China Securities Depository and Clearing Corporation reached an agreement on the overall Stock Connect inclusion arrangements for ETFs at the end of last year.
The parties are working closely on completing the preparations for launching relevant trading. A separate announcement will be made on the official launch date, the HKSAR government said.