Shenzhen-HK scheme about ready for launch

The details of the stock scheme connecting the Shenzhen and Hong Kong bourses are now ready and the launch is pending approval by regulators of the two markets, Song Liping, general manager of the Shenzhen Stock Exchange, said on Sunday.

"The development of the stock connect's technical system has been kicked off as well," Song, also a deputy to the National People's Congress (NPC), told reporters in Beijing during the ongoing two sessions.

Since the stock linkup between Hong Kong and Shenzhen was patterned after the Shanghai-Hong Kong Stock Connect scheme, which started in November 2014, the time period needed for preparing the linkup will be shortened, she said.

On Thursday before the opening of the NPC session, Xiao Gang, head of the China Securities Regulatory Commission, revealed that the stock linkup is expected to be approved in the first half of the year, while trading through the program will likely be officially commenced in the second half, Securities Daily reported on Friday.

The launch of the trading tie-up between Shenzhen and Hong Kong was mentioned by Premier Li Keqiang in his government work report delivered at the NPC's annual session on Thursday.

Plans for the establishment of the Shenzhen-Hong Kong Stock Connect scheme signify the government's selective acceleration of reforms in the financial sector, UBS Securities economists led by Wang Tao said in a note e-mailed to the Global Times on Thursday.

The options available for investors purchasing shares through the trading link between Shenzhen and Hong Kong would be different from those available through the Shanghai-Hong Kong Stock Connect scheme, according to Song, speaking of the viable multi-tier capital market in Shenzhen.

In addition to select shares on Shenzhen's main board, eligible shares on Shenzhen's small and medium-sized enterprises board and the NASDAQ-style board of growth enterprises will also be included in the investment options made available to investors, the head of the Shenzhen bourse disclosed, playing down concerns over potential fluctuations in stock prices following the official launch of the stock linkup.

"The funds going northbound to Shenzhen under the upcoming trading link might be more active compared to those going to Shanghai, as there are more active stocks trading on the Shenzhen bourse," Sun Jianbo, chief strategist at China Galaxy Securities Company in Beijing, told the Global Times over the weekend.

Among a slew of measures to boost trading through the Shanghai-Hong Kong scheme, which has had a lukewarm start so far, an increase in the number of investment products available for purchase on the linkup is being considered, Gui Minjie, chairman of the Shanghai Stock Exchange and a political advisor, said at a news conference on Saturday.


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