China has approved a long-awaited link between the Hong Kong and Shenzhen stock markets, state media reported on Tuesday, about two years after a similar link was established between the Shanghai and Hong Kong exchanges.
The preparation for the stock-trading scheme has been completed, Chinese Premier Li Keqiang announced in a statement posted on China's central government website.
Once operational, the link will make it easier for international traders to buy and sell shares listed on the exchange in Shenzhen, which hosts many technology-orientated firms, and further open up China's huge equity market.
The launch date for the link will come "at a proper time this year after the regulatory rules and technological preparations are completed," the China Securities Regulatory Commission said.
The plan to connect the exchanges was delayed by the mainland stock market crash of a year ago and subsequent volatility in prices.
A Hong Kong Investment Funds Association survey found that the Shenzhen-Hong Kong Stock Connect topped the wish list of international fund houses for market reform in China, the Hong Kong-based South China Morning Post reported.
The State Council decision came late afternoon, about two hours after the Shenzhen index closed 0.56 per cent higher at 10,882.95 points amid intense speculation. The Hong Kong Hang Seng index closed 21.67 points down at 22,910.84.
"The openness of the finance industry, including opening the capital market, is an important part of the whole openness of China," Li was quoted as saying at the State Council executive meeting.
"It plays an important role in improving China's finance industry's international competitiveness and the capacity for serving the real economy," he said.
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