Hong Kong widens Connect stock links for global funds to tap Star Market, tying city’s financial future closer to China’s heft
- China-domiciled investors will be able to invest in pre-revenue biotechnology companies listed on Hong Kong’s stock exchange
- Global funds will be allowed to access shares on Shanghai’s Star Market via an expanded Stock Connect scheme from Hong Kong
Hong Kong will broaden its cross-border investment channels with mainland China’s stock exchanges, offering the city as the stepping-off point for international funds to gain access to one of the world’s best-performing capital markets.
“It is always good to extend the investor base in view of more innovative companies on the Star Market,” said Tom Chan Pak-lam, chairman of the Institute of Securities Dealers, an industry body for local brokers. “Biotech is a hot industry in Hong Kong and China, so any addition of these companies to the Stock Connect will encourage more mainland investors to trade in Hong Kong.”
The initiative ties Hong Kong’s economic future closer to mainland China’s market size and financial muscle, after a tumultuous year that has seen the city paying the political price for its role and place in Chinese politics. It’s also a boon for Hong Kong’s role as China’s international financial centre, as it helps channel capital to an economy with a closed capital account and non-convertible currency.
