HongKong and Chinese Mainland Capital Market Forum “SZ-HK Stock Connect Insights”
SZ-HK Stock Connect to launch soon, interconnecting capital markets
HongKong and Chinese Mainland Capital Market Forum “SZ-HK Stock Connect Insights” was held in Hong Kong on Nov. 10. This forum has invited CY Leung, chief executive of Hong Kong Special Administrative Region, and representatives of financial institutions and industry experts from home and abroad, to discuss together the realistic influence and strategic significance of Shenzhen-Hong Kong Stock Connect (“SZ-HK Stock Connect”), explore investment opportunities in the two capital markets, and at the same time make in-depth discussion on issues such as RMB internationalization and financial technology.
SZ-HK Stock Connect to interconnect capital markets
From the end of 2014 when the Shanghai-Hong Kong Stock Connect (“SH-HK Stock Connect”) was put into operation, to the approval of SZ-HK Stock Connect, the interconnection of A-share market and the Hong Kong stock market, which has long been anticipated by capital markets on both sides, has entered a new stage. The launch of SZ-HK Stock Connect will bring more financial cooperation opportunities for the two markets, solidify and improve Hong Kong’s position as the global financial center. Meanwhile, the opening-up of China’s capital market is also expected to reach a higher level.
Charles Li, chief executive of Hong Kong Exchanges and Clearing Limited, and Tan Yueheng, chairman of China Securities Association of Hong Kong and president of Bank of Communications International, have given keynote speeches on the interconnection of Mainland and Hong Kong capital markets. Tan indicated in the speech that the two markets will be further intergraded after the launch of SZ-HK Stock Connect, and this will contribute to the improvement of valuations of Hong Kong stocks and boost the trading volume.
“Yesterday (Nov.9, Hong Kong time), Donald Trump won the US presidency. Affected by this result, the global financial market experienced turbulence in a short period of time. Gold price fluctuated drastically, Hang Seng Index declined by over 900 points, and US futures prices also plummeted. In this regard, political instability in the near term would result in volatility in the commodities and securities markets. Hong Kong’s securities market has long boasted advantageous conditions. The launch of SZ-HK Stock Connect could bring more opportunities for Hong Kong. Following the pace and macro development direction of the Mainland, Hong Kong can promote closer ties between the two markets in economy and trade. This in turn will further benefit Hong Kong,” says Ju Lulong, managing director of First Gold.
Hu Yifan, chief economist with UBS in Greater China, has had in-depth exchanges of views with representatives of the three stock exchanges (Hong Kong, Shenzhen and Shanghai) and delegates from securities industry as the host guest of the discussion.
Opening of China’s capital market promotes RMB internationalization
RMB becomes freely usable currency after being included in the SDR currency basket. While the launch of SZ-HK Stock Connect and SH-HK Stock Connect can provide an effective investment channel for overseas RMB holders and improve the two-way flow mechanism of offshore yuan market and onshore yuan market, adding impetus to the internationalization of RMB. At this forum, Cai E’sheng, former vice chairman of China Banking Regulatory Commission and Xie Guodong, head of economy and policy research division of Bank of China (Hong Kong), have given keynote speeches on RMB internationalization.
Internet finance energizes capital market
In 2016, Internet finance was included in the 13th Five-Year Plan. Regulatory policy aimed at promoting healthy development of Internet finance was subsequently released. In the long run, Internet finance will gradually form benign competition and cooperation with traditional finance in activating “sleeping money”, and ultimately guide capitals to flow into real economy, pushing forward the supply-side reform. Various representatives from the Internet finance circle have attended the forum, deeply discussing Internet finance and capital market innovation.
This forum is co-hosted by Xinhua Finance Agency and First Gold，with the theme of interconnection and opening of Hong Kong and Mainland capital markets and Internet finance.Experts and Scholars in the financial field from home and abroad have attended the forum.
Translated by Adam Zhang
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