The Stock Connect trading link has shown steady growth since its launch in November but the future holds huge opportunity
Hong Kong Exchanges and Clearing has said
its Stock Connect trading link will be rolled out to more
Chinese exchanges and across asset classes, helping to
liberalise the renminbi and revolutionise international access
to China. But the real winner will be HKEx.
Stock Connect was launched by HKEx and the
Shanghai Stock Exchange last November providing a means for
mainland investors to trade certain Hong Kong listed stocks and
for international investors with Hong Kong brokerage accounts
to trade in China.
It works by enabling investors in both
Hong Kong and the mainland to trade a defined pool of equities
in the other market without connecting directly with that
market, dealing with currency conversion or the associated
restrictions and complexities.
The launch of Stock Connect has been
deliberately restrictive. Its implications for the
liberalisation of RMB and the opening up of the Chinese capital
markets mean the link is being treated with caution by Chinese
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