Shenzhen-HK connect ready to go

Updated 2016-11-26 12:58:37 China Daily

The securities regulators of the Chinese mainland and Hong Kong on Friday announced that the much-anticipated Shenzhen-Hong Kong Stock Connect program will officially launch on December 5, a step to further liberalize the mainland's capital market.

The stock trading link, similar to the existing program between Shanghai and Hong Kong, will allow overseas investors to trade stocks on the Shenzhen Stock Exchange. Mainland investors will also have greater access to the Hong Kong stock market.

The launch of the trading link, a timely move by the regulators, underscored policymakers' desire to continue to open up the Chinese capital market against the backdrop of a weakening currency and rising uncertainties in the global economy, analysts said.

"With Trump elected (as US president) and the yuan facing depreciation pressure, the opening up at this stage shows the regulators' strong confidence in the reform and future performance of the Chinese economy, as well as their strong determination to open up the mainland's capital market," said Cheng Shi, executive director and head of research at ICBC International Research.

In their joint statement on Friday, the regulators of the mainland and Hong Kong said arrangements for transaction settlement, investment quota management and technical preparations for the new trading link were well in place.

The regulators also vowed to strengthen cooperation in cracking down on illegal cross-border market activities.

The regulators in August removed the total investment quota of 550 billion yuan ( billion) for the trading link. But there will still be a daily quota of 13 billion yuan for overseas investors to trade Shenzhen-listed stocks. Mainland investors can trade up to 10.5 billion yuan of Hong Kong stocks under the new trading program.

Hong Hao, chief strategist at BOCOM International, said the new program may help boost the value of small and mid-cap stocks with good earnings, given that the Shenzhen market is known as the home of many high-tech and innovative Chinese companies with promising growth potential.

But he warned that much of the good news could already be reflected in the current stock prices, and trading risks could rise in the short term, given that the US dollar will continue to strengthen. This could be negative for asset prices in the Asian markets, he added.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58March 22 2018 14:22:39

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16March 22 2018 14:22:39

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18March 22 2018 14:22:39

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

Most Watched

China World Business Sports Showbiz Audio
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
China World Fun Travel Entertainment Sports
Beijing Shanghai Guangzhou
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords