Mainland and Hong Kong ETFs will join stock connect in move seen as ‘gift’ for 25th anniversary of handover
- The move comes ahead of the July 1 anniversary celebrating 25 years since the handover, as Hong Kong tries to strengthen its role as a global financial hub
- ETFs which track main indexes such as the Hang Seng Index, Hang Seng China Enterprise Index and Hang Seng Tech Index could be selected in the first batch
The newly announced inclusion of exchange-traded funds (ETFs) in mainland China’s stock connect scheme with Hong Kong will help consolidate the city’s role as a financial hub and bridge between China and the rest of the world, according to experts.
The China Securities Regulatory Commission (CSRC) and Hong Kong Securities and Futures Commission have reached an in-principle agreement on the inclusion, with the goal of deepening mutual market access between the mainland and Hong Kong, according to an announcement posted on the CSRC website on Friday night.
Official implementation of the proposal will come in about two months, according to CSRC.
“The implementation of mutual access of ETFs marks another milestone in the continual integration of the two capital markets,” Hong Kong Chief Executive Carrie Lam was quoted as saying in a government statement on Friday.
In the same statement, Financial Secretary Paul Chan said it promotes liquidity as well as sustainable development of the ETF markets on both sides of the border. “The initiative also promotes the further opening up of the mainland financial market, and at the same time, consolidates Hong Kong’s role as the gateway and the bridge for flows of international and mainland capital.”