Hong Kong Exchanges and Clearing Ltd is the holding company for the city’s stock exchange, futures exchange and clearing company. Its market capitalisation made it the world’s biggest listed bourse as of the end of 2012. In December 2012, the HKEx clinched the US$2.2 billion takeover of the London Metal Exchange, the world's biggest marketplace for industrial metals.
HKEx shares soar, trading halted, on hint of Shanghai cross-trading deal
A potential cross-trading link-up between Hong Kong Exchanges and Clearing and its Shanghai counterpart boosted the share price of the local bourse yesterday, with investors anticipating a return to the golden days of trading seven years ago.
HKEx suspended trading in its shares at 3.12pm. They last traded up 5.44 per cent at HK$126 after a high of HK$126.40 following a report that HKEx had reached an agreement on a system link-up with the Shanghai exchange.
Such a scheme would allow mainland investors to trade Hong Kong stocks through mainland brokers, with the Shanghai exchange passing orders to HKEx. Hong Kong investors could also trade mainland shares through the same arrangement.
"HKEx has been in discussions with its mainland counterparts regarding the potential establishment of mutual market connectivity initiatives," the exchange said in response to the report, adding that "no agreement has been entered into and there is no assurance that an agreement on mutual market connectivity will be entered into".
It also said it would make a further announcement "when appropriate".
The potential deal also boosted the shares of Hong Kong-listed mainland brokerages.
"Although the agreement has not yet been signed, it looks like the timing is close," said legislator Christopher Cheung Wah-fung, who represents the financial services sector. "Beijing has indicated it would like to reform its markets further, which will support cross-trading between Hong Kong and the mainland. This will help boost turnover of the local market."
A "through-train" scheme proposed by Beijing in August 2007 saw turnover reach HK$200 billion a day but it fell after the plan was dropped three months later. Turnover was HK$73.65 billion yesterday.
HKEx shares will resume trading today.