This July 4, 2018 photo shows the bronze bull sculptures outside the Hong Kong stock exchange building in Central, Hong Kong. (CALVIN NG / CHINA DAILY))
Hong Kong Stock Exchange is set to attract more foreign companies making initial public offerings in the city after Chinese mainland financial regulators decided to allow overseas enterprises listed in the special administrative region to engage in cross-border stock trading, says Financial Secretary Paul Chan Mo-po.
Writing in his Sunday blog, Financial Secretary Paul Chan Mo-po said that besides attracting more foreign enterprises having close business ties with the mainland to go public in the SAR, the move will strengthen Hong Kong’s competitiveness and uniqueness as a global financial hub
Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, told a forum on Friday investors on the mainland would be permitted to trade in the shares of Hong Kong-listed foreign companies under the Shanghai-Hong Kong Stock Connect for the first time.
Writing in his Sunday blog, Chan said that besides attracting more foreign enterprises having close business ties with the mainland to go public in the SAR, the move will strengthen Hong Kong’s competitiveness and uniqueness as a global financial hub.
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“It will increase the liquidity and valuation of traded stocks and further open up the mainland’s financial markets in a high-quality manner,” he said.
The CSRC also plans to introduce yuan-dominated stock trading counters through the SAR-mainland investment channel. The plan would increase the liquidity of offshore renminbi as it would provide an additional option for mainland investors to use the Chinese currency to make deals in the same stock listed in Hong Kong.
A Hong Kong working group set up earlier this year is geared to handling possible technical difficulties in implementing the plan. Chan said proposals would include introducing a bill to waive stamp duty for investors in yuan-denominated trading and would be submitted to the Legislative Council for consideration later this year.
This undated file photo shows the entrance of the China Securities Regulatory Commission in Beijing, China. (LI XIN / XINHUA)
The China Securities Regulatory Commission also plans to introduce yuan-dominated stock trading counters through the SAR-mainland investment channel. The plan would would provide an additional option for mainland investors to use the Chinese currency to make deals in the same stock listed in Hong Kong
The CSRC will also support Hong Kong in launching futures trading linked to mainland government bonds. Along with the Swap Connect announced in July, international investors will be able to access the mainland’s interest-rate derivatives market through Hong Kong under the program.
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Chan said the connect programs have enabled global investors to hedge the risk of interest-rate fluctuations in yuan-dominated assets.
“With better investment risk management, liquidity in the government bond market will be improved and the bid-ask spread will be reduced. This will further expand international participation in the government bond trading, helping renminbi internationalization,” he said.
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“We must lead Hong Kong’s financial market and financial services in opening up for greater development to better serve the real economy and the country’s overall development.”
tianyuanzhang@chinadailyhk.com