London and Shanghai agree to look into stock market link-up but time difference may pose problem
HK brokers raise concerns about lost business and time differences as officials agree to look at link between London and Shanghai exchanges
British and Chinese officials have agreed to study a possible link-up between the London and Shanghai stock exchanges, raising fears among Hong Kong brokers of a shrinking China business pie here.
Britain and China will carry out a feasibility study for a stock exchange connect scheme between London and Shanghai, according to a document issued by the British finance ministry in Beijing yesterday at the end of the annual UK-China Economic and Financial Dialogue.
The document, released before British Finance Minister George Osborne's trip to China this week, also said the People's Bank of China would issue a yuan-denominated central bank note in London in the near future, but did not provide a time frame.
A spokeswoman for Hong Kong Exchanges and Clearing said the feasibility study "is a positive sign that the mainland will continue to open".
"This is not a zero sum game and wider opening of the mainland capital market will have knock-on benefits for Hong Kong," she said.
Many local players are less upbeat even as they take heart from the myriad technical issues that could hinder a London-Shanghai stock connect.
"If London and Shanghai launch a stock connect, Hong Kong will lose its advantage as the only market with a link to Shanghai. The proposal is a threat to Hong Kong's market. However, I don't know if such a link will happen soon," said Louis Tse Ming-kwong, director of VC Brokerage.