HONG KONG, Nov 9 – China will announce a start date for a delayed trading link between Hong Kong and Shanghai’s stock exchanges “soon”, Hong Kong chief executive Leung Chun-ying said today. The bourse connection originally slated for last month is expected to allow the equivalent of US$3.8 billion (RM12.7 billion) a day in cross-border transactions, and is seen as a key step towards greater financial liberalisation in the world’s second largest economy.

But it was unexpectedly delayed as pro-democracy protesters continued to shut down sections of the financial hub, though a senior official denied a connection to the demonstrations. “The relevant authorities will make an announcement soon,” Leung told a forum on the sidelines of an Asia Pacific Economic Cooperation (Apec) CEO summit in Beijing.

Leung added that he asked China’s President Xi Jinping for the stock connect to be implemented “as soon as possible”. Thousands of protesters have taken to the streets in fury at Beijing’s insistence that candidates running in Hong Kong’s 2017 leadership election are screened by a loyalist committee, an arrangement critics have branded “fake democracy”.

The protesters have also called for Leung to step down. China’s official news agency Xinhua said Xi had backed Hong Kong authorities’ “efforts to safeguard the rule of law and maintain social order” in the meeting. Asked about the delay to the stock connect scheme, Hong Kong stock exchange President Chow Chung-kong told AFP last month that the city’s authorities have “no control over the proceedings.”

“This is a major decision for the Chinese government and must take into account a range of factors” to “select the best time,” he added. If it goes ahead, the scheme is expected to see volumes on both exchanges rise significantly, particularly Shanghai, but it is subject to strict limits in order to preserve capital controls in China, where Communist authorities keep a tight grip on the yuan currency. Plans for a similar tie-up in 2007 sparked a surge in share prices in both bourses but they were eventually scrapped as the global financial crisis unfolded.

News World

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.