Last week, the China Securities Regulatory Commission (CSRC) and the Securities and Futures Commission (SFC) announced that were approving the deployment of a stock connect bridge between Shenzhen and Hong Kong.
The move was designed to boost the development of capital markets in mainland China by connecting all the country’s stock exchanges – Hong Kong, Shanghai and Shenzhen – and to provide more open access to capital markets in the country.
Finance Magnates today learned that China is aiming to launch the highly-anticipated stock-trading link in mid-December, according to a report in The Wall Street Journal.
Boosting Profits in Low FX VolatilityGo to article >>
Chinese authorities were originally considering launching the program in the second half of last year, but abandoned their plans after the stock-market crash in the summer.
The Shenzhen stock-link program has been long-awaited following the launch of the Shanghai-Hong Kong Stock Connect in November 2014. This allows foreign investors to tap into China’s largest blue-chip companies listed on the Shanghai exchange and gives Chinese investors unprecedented access to the Hong Kong market.
The Shenzhen link will put around 880 stocks, accounting for more than $1 trillion in market capitalisation on offer to global investors.
The ChiNext, a listing board focused on fast-growing startups, will also be opened up although it will be limited to professional institutional investors.
Global investors can presently purchase up to 300 billion yuan worth of shares in over 500 Shanghai companies. Regulators have said that under the new stock link scheme, there will no longer be an upper limit on the total amount of Chinese shares foreigners can hold.