The Hong Kong and Shenzhen stock market connect plan is still on track to be launched this year despite the volatile trading conditions spawned by a market rout, but brokers in the city warn the scheme may meet problems getting off the ground. Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia told reporters "the Hong Kong-Shenzhen stock connect is ready to go in the next three to four months", but added it would be up to Beijing. Beijing has not announced an exact launch date for the scheme, a cross-border investment channel that allows investors in each market to trade shares in the other. However, Hong Kong government officials and HKEx chairman Chow Chung-kong have said the scheme would be launched in the second half while all stock brokers were also told to prepare their trading systems for the new linkage. The market widely expects the scheme to launch in the fourth quarter. However, many brokers are speculating the scheme may be delayed to next year due to the market slump in Shanghai and Shenzhen where Chinese equities lost some US$4 trillion in value. "As the priority in the mainland now is to stabilise the market, the actual timing hinges on when the market is normalised," Li said on the sidelines of a listing ceremony yesterday. "But the general trend of increasing integration of markets across the border remains unchanged." Brokers believe Beijing will need to solve many problems in Shenzhen before a launch can happen, including the fact that hundreds of companies have halted share trading. "There are still over 300 companies suspended in Shenzhen and some of them have extra high [price-earnings ratios] of 100 times. It will not work if so many companies are still suspended from trading," legislator for financial services sector Christopher Cheung Wah-fung said. In Shenzhen, 311 firms are in voluntary suspension as of yesterday, representing about 18.37 per cent of the total listed companies. The number stood at more than 900 in early July. Last month, the Shanghai and Shenzhen exchanges put in their worst monthly performance since 2009, falling more than 14 per cent each, prompting intervention by the authorities to bolster share values. "The recent rescue plan by Beijing has discouraged international investors as they believe such action is not normal market practice," Cheung said. "Beijing should work out how to handle future market volatility and protect the interests of international investors before launching a new connection scheme." Average daily turnover of international investors trading Shanghai stocks via the stock connect scheme between Hong Kong and Shanghai has dropped to 8.92 billion yuan (HK$11.12 billion), down 21.47 per cent from the level in June. In July, daily sell orders averaged 113.9 billion against 82.4 billion of buy orders. The rescue measures have already affected firms such as Citadel Securities, a unit of US hedge fund Citadel, which said on Monday that one of its China accounts had been barred from trading by securities regulators. This makes it one of the first foreign institutional investors to be caught up in Beijing's crackdown on "malicious short selling" the government has blamed for the market's sharp fall. It was among 24 accounts barred from the mainland’s two major stock exchanges on Friday for three months.