Shenzhen-Hong Kong stock trading link to get operational by mid-December - HKEX chief

After a long-awaited approval the State Council, China’s cabinet last week gave the green signal to launch the much anticipated stock-trading link between Shenzhen and Hong Kong. The stock connect program launched between Shanghai and Hong Kong in November 2014 will enable overseas investors to trade shares listed on the Shenzhen Stock Exchange via the Hong Kong Stock Exchange without any special qualifications.

Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia said “We hope we can launch the Shenzhen-Hong Kong Stock Connect before Christmas, and it could be in three months. But the market still needs preparation and regulatory approval.”

The Shenzhen link will enable overseas investors to trade shares listed on the Shenzhen Stock Exchange via the Hong Kong Stock Exchange without any special qualifications. Some 880 stocks, representing more than $1 trillion in market capitalization now will be on the menu of global investors. Investment flows are likely to shift, with big implications for the both the stock and currency markets in China.

In order to facilitate the rollout of the stock-link program, China’s securities clearing agency has decided to postpone a system upgrade until the launch is complete, WSJ quoted unidentified sources. The clearing agency had originally planned to upgrade its system in early October, they added.