Called Shanghai-Hong Kong Stock Connect, the link enables Chinese and Hong Kong investors to trade a specified range of listed stocks in their respective markets through local securities companies.
In addition, the cross-border trading venture is expected to provide foreign investors with access to mainland China stocks from Hong Kong, resulting in CNY23.5bn ($3.8bn) worth of trades a day.
Up to CNY10.5bn ($1789m) of the daily quota would be taken up by the mainland Chinese investors, while the remaining would go to Hong Kong, as reported by The Associated Press.
The link was launched by Stock Exchange of Hong Kong Limited, Shanghai Stock Exchange, China Securities Depository and Clearing Corporation, Hong Kong Securities Clearing, and the Shanghai-Hong Kong Stock Connect.
Hong Kong chief executive Leung Chun-ying said the project will increase the competitiveness of both stock markets and enhance Hong Kong’s status as a major offshore RMB trading hub.
Hong Kong Exchanges and Clearing Limited chairman C K Chow said: "It is a breakthrough in the opening up of China’s financial markets and an important milestone in the development of Hong Kong as a unique gateway between the mainland and international investors."
China Securities Regulatory Commission head Xiao Gang was quoted by Agence France Presse as saying that the new platform was "conducive to the internationalisation of the renminbi."
The system was originally expected to start operations in October, but was delayed for reasons unknown, leading to speculation that the project might be held up by technical or political hurdles, as reported by Reuters.
Image: Shanghai-Hong Kong Stock Connect has launched giving foreign investors with access to mainland China’s stock market. Photo: audfriday13/FreeDigitalPhotos.net.
