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Tuesday, January 20, 2015, 08:57

New ‘through train’ closer

By Emma Dai in Hong Kong
New ‘through train’ closer
Chief Executive Leung Chun-ying told the Asian Financial Forum on Monday that the opening of the mainland’s capital account would help Hong Kong go to great lengths in financial development. (Roy Liu / China Daily)

The Shenzhen-Hong Kong Stock Connect program has moved one step closer to reality, with further progress on setting up the second stock cross-trading link between the SAR and the mainland expected this year.

The optimism was expressed on Monday by both Hong Kong Exchanges and Clearing Ltd Chief Executive Charles Li Xiaojia and Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung.

Implementation of the Shenzhen-Hong Kong stock link — a new equity market linkage replicating the Shanghai-Hong Kong Stock Connect program — is expected to make solid improvement later this year, Li told the Asian Financial Forum (AFF) in Hong Kong.

It’s “the sooner the better” that we extend the stock link to Shenzhen, Li said. Although details of the program have yet to be worked out, it would be an advanced version of the existing one, he said, but no timetable has been fixed for the time being.

Speaking on the sidelines of the AFF, Chan said the Shenzhen equity market link with Hong Kong would be the second step after the Shanghai-Hong Kong program which was launched in November last year. He said the authorities are reviewing the Shanghai-Hong Kong program, and he believed the technical preparations could be completed this year.

Billed as one of the leading annual events in the global financial calendar, the AFF draws heavyweight regulators, policymakers and market players from around the world giving their insight into global financial issues.

The two-day event continues on Tuesday with China Daily presenting a roundtable forum entitled “China, ASEAN and the New Silk Road — Global Financial Perspectives” which will shed light on the latest moves in Southeast Asia by the world’s second-largest economy as well as the opportunities offered for investors under various initiatives by China.

Xiao Gang, chairman of the China Securities Regulatory Commission, told Monday’s session that the Shanghai-Hong Kong stock link has gone on well since its launch, adding there’s much room for the program to go further.

He emphasized that, as the next step, the authorities would first optimize the link with Shanghai regarding market conditions. 

Xiao urged investors on both sides to adapt to rules and regulations in each other’s markets, such as the price limit in the A-share market, stressing that investors need time to learn.

In his opening address at the AFF, Chief Executive Leung Chun-ying said the Shanghai-Hong Kong Stock Connect has enhanced Hong Kong’s status as a super financial and trade hub in the region, and the link has enlarged investor bases on both sides. He said the opening up of China’s capital market will continue to bring opportunities to Asia.

Xiao added that Hong Kong can expand financial cooperation with the mainland, in areas such as the liberalization of trade services and development of security markets.

In future, he said, the two sides will continue to work on the Qualified Foreign Institutional Investor and the Renminbi Qualified Foreign Institutional Investor programs, as well as mutual recognition of investment funds.


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