HONG KONG: China will start its second stock-trading link with Hong Kong on Dec. 5, another step in the country’s efforts to open up the mainland market. The Shenzhen-Hong Kong connect will give investors in the city access to stocks on the Shenzhen Stock Exchange, where many Chinese technology companies are listed. The program has been awaited for more than two years following the launch of the Shanghai-Hong Kong connect in November 2014.
The link’s start was announced by regulators amid the yuan’s biggest monthly decline against the US dollar since a one-time devaluation in August last year. The Shanghai and Shenzhen connections are a key part of China’s push to internationalise its currency and should also help the country’s stocks integrate into the world’s markets. When MSCI Inc. in June rejected the nation’s shares for inclusion in its global benchmarks, among the issues it cited were barriers facing foreign investors wanting to trade in China.
“We’re ready for another milestone in our mutual market access initiative,” Charles Li, chief executive officer of Hong Kong Exchanges & Clearing Ltd., said in a statement. “Shenzhen connect will open up another mainland market for international investors, give investors on both sides of the boundary more choices and enhance access to the mainland’s stock market through our market and to our market through the mainland market.”
