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Shanghai-London Stock Connect may kick off on Dec.14

Xinhua Financein CFBOND
2018-12-06 09:05

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The Shanghai-London Stock Connect program may see its launch on Dec. 14 in London and start trading early next year, said a report of China Securities Journal on Tuesday quoting its multiple sources.

At the launch ceremony, a list of participating Chinese and British companies in this stock connect program will be revealed. Formal trading under this program may begin after January 2019.

The Shanghai-London Stock Connect program enables qualified listed companies at the Shanghai Stock Exchange (SSE) to issue global depository receipts (GDRs) at the London Stock Exchange (LSE) and those at the LSE to offer Chinese depositary receipts (CDRs) at the SSE, giving investors of the two countries more convenient access to each other's stock market.

Huatai Securities Co., Ltd. may become the first Chinese company to issue its GDRs at the LSE following the kickoff of this stock connect scheme.

On Nov. 23, Huatai Securities Co., Ltd. filed a confirmation of intention with the LSE to float up to 82.515 million GDRs to raise a minimum of 500 million U.S. dollars. Proceeds from this deal will be used to enhance this company's international business and capital position, according to the above confirmation of intention.

The securities regulators of both China and the U.K. have greenlighted Huatai's application for the issue of these GDRs but this company has not yet given any update about its offering.

As of now, no LSE-listed companies have announced their intention to issue Chinese depository receipts (CDRs) at the SSE.

The Shanghai-London Stock Connect is expected to bring a boost to China's stock market.

The A-share market's two existing stock connect programs with Hong Kong had witnessed far more capital inflows into the Chinese mainland than those going abroad, and this will likely be the case for the Shanghai-London Stock Connect, said Li Daxiao, chief economist of Yingda Securities Co., Ltd.
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