Shenzhen stock through train to debut in second half of this year
Shenzhen Stock Exchange chief executive Song Liping said the stock connect scheme linking the bourse with Hong Kong would debut in the second half of this year as regulators were set to soon grant approval for the through train programme.
Shenzhen Stock Exchange chief executive Song Liping said the stock connect scheme linking the bourse with Hong Kong would debut in the second half of this year as regulators were set to soon grant approval for the through train programme.
"The go-ahead is likely to be given within the first half of this year and the programme will likely be launched in the second half," Song told a press conference on the sidelines of the annual session of the National People's Congress.
"The trading framework and general preparations have been made while simulated trading will be conducted to test the system after the mainland and Hong Kong regulators officially approve the scheme."
Song's remarks shed light on Premier Li Keqiang's statement in a government report last Thursday, where he said the Hong Kong-Shenzhen stock connect scheme would kick off at an "appropriate time".
The Shanghai and Hong Kong stock exchanges started cross trading shares in November.
Song said the preparatory work for the Shenzhen-Hong Kong stock connection programme could largely be cut short because the legal framework was ready and the experience in the Shanghai-Hong Kong scheme could be used to fast-track preparations.
Under the Shanghai-Hong Kong scheme, mainland investors can spend a total of 250 billion yuan (HK$314 billion), or 10.5 billion yuan a day, for Hong Kong equity purchases, and Hong Kong investors can invest up to 300 billion yuan, or 13 billion yuan a day, to buy A shares.
Song said the Shenzhen-Hong Kong scheme would have the same quota as the Shanghai-Hong Kong programme. She also played down competition with Shanghai.
"I have much confidence in both the stock connection schemes," she said. "It is a good chance for the mainland stock market to fine-tune the whole system to enhance efficiency."
As of Friday, mainland investors showed tepid interest in buying Hong Kong shares with only 10.5 per cent of the southbound quota, or 26.3 billion yuan, being used. Hong Kong investors had used 110 billion yuan of their northbound quota by Friday.
Individual investors on the mainland are not qualified for the Shanghai-Hong Kong stock connect scheme unless they can meet the minimum capital requirement of 500,000 yuan each. The capital requirement would be unchanged for those who planned to take part in the Shenzhen-Hong Kong through train, Song said.
When the Shenzhen and Hong Kong exchanges are linked, Hong Kong investors will gain access to the SME board and the ChiNext market at the Shenzhen bourse where hundreds of small firms and start-ups are traded. "We'll make use of systems and tools to help mainland investors understand companies listed in Hong Kong," Song said. "We hope mainland investors will actively participate in the scheme."
