China is boosting stock market ties with Hong Kong with new measures allowing cross-border stock investment between Hong Kong and Shanghai.
China’s regulator said it would allow mainland investors to trade shares in designated HK-listed firms.
At the same time, Hong Kong investors will be allowed to buy shares in companies listed in Shanghai.
The chairman of the Hong Kong exchange called it a “breakthrough” for the opening up of China’s capital markets.
The pilot project will launch after a preparation period of about six months.
During the trial period, Hong Kong investment in Chinese stocks will be limited to a daily quota of 13bn yuan ($2bn; £1.2bn).
Mainland investment in Hong Kong stocks will be limited to a daily quota of 10.5bn yuan.
The pilot scheme will also limit trading to companies already dual-listed in Shanghai and Hong Kong, as well as other selected blue chip companies.
The tie-up was announced hours after China’s Premier Li Keqiang said China would “actively create conditions to establish a transaction interconnection mechanism for the Shanghai and Hong Kong stock exchanges, to push forward the two-way opening of capital markets in mainland China and Hong Kong.”
The premier made the comments at the Boao Forum for Asia in China’s southern island Hainan.
via BBC
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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