Beijing plans to enable mutual stock market access between Hong Kong and Shanghai, Premier Li Keqiang announced today, at the opening of the Boao Forum for Asia.
The Hong Kong Government welcomed the decision.
The Shanghai-Hong Kong Stock Connect pilot programme will allow Mainland investors to trade Hong Kong stocks through the Shanghai Stock Exchange directly, while Hong Kong and overseas investors can also trade Shanghai stocks through the Hong Kong’s Stock Exchange directly.
It will take about six months to prepare to launch the programme.
Cross-border investment will be subject to quotas. Mainland investors’ Hong Kong securities’ purchase will be capped at an aggregate net quota of RMB250 billion and a daily net quota of RMB10.5 billion, while Hong Kong and overseas trades for Shanghai stocks will be capped at an aggregate net quota of RMB300 billion and a daily net quota of RMB13 billion.
Financial Secretary John Tsang said the programme is mutually beneficial. It will help increase institutional investment in the Shanghai securities market, enable Mainland investors to invest overseas in an orderly way, open the Mainland's capital market, and promote the renminbi’s internationalisation.
For Hong Kong, it will strengthen the co-operation between the two markets, catalyse the two-way renminbi fund flows between the onshore and offshore markets, and increase the liquidity of the offshore renminbi market in Hong Kong, he added.
