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Friday, 26 June 2009
Linking of HK, Shenzhen bourses mulled
Hong Kong and Shenzhen could integrate their equity markets into one financial market to attract investors from both areas, said Lawrence Lau Juen-yee, vice-chancellor of the Chinese University of Hong Kong.
Hong Kong and Shenzhen could integrate their equity markets into one financial market to attract investors from both areas, said Lawrence Lau Juen-yee, vice-chancellor of the Chinese University of Hong Kong.
“Hong Kong has a special relationship with Guangdong province,” he said at a financial forum on closer financial co-operation between Hong Kong and Guangdong yesterday. “It would be good for the two stock markets to connect so that Hong Kong could attract international investors while Shenzhen could complement by drawing domestic investors.”
Mr. Lau said banks in Guangdong could lead the mainland in opening branches in Hong Kong. Small enterprises in both locations should also be allowed to refinance in either Hong Kong dollars or yuan.
Economists said linking the stock markets in Shenzhen and Hong Kong could strengthen Hong Kong’s role as a channel for foreign funds to the mainland but might require Beijing to relax capital controls and speed up the convertibility of the yuan.
“There needs to be a proper mechanism when it comes to the movement of funds across the border between the stock markets,” said Kelvin Lau, an economist with Standard Chartered Bank.
Meanwhile, Financial Secretary John Tsang Chun-wah said the government hoped to implement the latest supplement to the Closer Economic Partnership Arrangement (Cepa) soon. In the supplement, announced in early May, Beijing offered new preferential treatment to Hong Kong, relaxing rules in more than 20 mainland service sectors, particularly banking and finance.
One-third of the new measures under Cepa would be carried out in Guangdong, Mr. Tsang said.
These include loosening restrictions on Hong Kong banks with subsidiaries on the mainland that want to open sub-branches in Guangdong. Local brokerage firms might also be able to offer investment advice in Guangdong.
On the financial front, mainland officials are exploring the introduction of exchange-traded funds with exposure to Hong Kong-listed stocks.
Mr. Tsang said Hong Kong and Guangdong could complement each other in financial services to consolidate the city’s position as an international financial centre.
“The development of the tertiary [financial services] sector in Guangdong will not threaten Hong Kong’s competitiveness,” he said. “Both economies have their comparative advantages and could work together to bring mutual benefits.”
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Linking of HK, Shenzhen bourses mulled
Natalie Chiu
25 June 2009
Hong Kong and Shenzhen could integrate their equity markets into one financial market to attract investors from both areas, said Lawrence Lau Juen-yee, vice-chancellor of the Chinese University of Hong Kong.
“Hong Kong has a special relationship with Guangdong province,” he said at a financial forum on closer financial co-operation between Hong Kong and Guangdong yesterday. “It would be good for the two stock markets to connect so that Hong Kong could attract international investors while Shenzhen could complement by drawing domestic investors.”
Mr. Lau said banks in Guangdong could lead the mainland in opening branches in Hong Kong. Small enterprises in both locations should also be allowed to refinance in either Hong Kong dollars or yuan.
Economists said linking the stock markets in Shenzhen and Hong Kong could strengthen Hong Kong’s role as a channel for foreign funds to the mainland but might require Beijing to relax capital controls and speed up the convertibility of the yuan.
“There needs to be a proper mechanism when it comes to the movement of funds across the border between the stock markets,” said Kelvin Lau, an economist with Standard Chartered Bank.
Meanwhile, Financial Secretary John Tsang Chun-wah said the government hoped to implement the latest supplement to the Closer Economic Partnership Arrangement (Cepa) soon. In the supplement, announced in early May, Beijing offered new preferential treatment to Hong Kong, relaxing rules in more than 20 mainland service sectors, particularly banking and finance.
One-third of the new measures under Cepa would be carried out in Guangdong, Mr. Tsang said.
These include loosening restrictions on Hong Kong banks with subsidiaries on the mainland that want to open sub-branches in Guangdong. Local brokerage firms might also be able to offer investment advice in Guangdong.
On the financial front, mainland officials are exploring the introduction of exchange-traded funds with exposure to Hong Kong-listed stocks.
Mr. Tsang said Hong Kong and Guangdong could complement each other in financial services to consolidate the city’s position as an international financial centre.
“The development of the tertiary [financial services] sector in Guangdong will not threaten Hong Kong’s competitiveness,” he said. “Both economies have their comparative advantages and could work together to bring mutual benefits.”
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