Hong Kong To Launch China Stock Investment Bridge

Hong Kong is working night and day to launch an initiative that will let global investors trade Chinese stocks from the city for the first time and secure the former British colony’s position among the world’s pre-eminent share markets.

The Hong Kong and Chinese governments agreed in April to allow international investors to trade Shanghai ‘A’ shares via the Hong Kong stock exchange while mainland investors will be able to trade Hong Kong ‘H’ shares via the Shanghai Stock Exchange, subject to quotas both ways.

To meet an October deadline, regulators, brokers and engineers in Hong Kong have shunted other projects to the bottom of their to-do list, delaying technology upgrades, putting off new product launches and pushing market reforms onto the backburner.

But the rush to launch the complex project risks a technology snafu that could lead to potential losses on investors’ portfolios, people in the industry say. They also worry that the Hong Kong and Shanghai financial industry may not be fully prepared by October.

“My concern is that some exchange participant firms won’t be ready, and many buy-side firms won’t be either, which means the first few months may be quiet as institutional investors wait and see how the initial implementation pans out,” said Stephane Loiseau, head of cash equities for Asia Pacific at Societe Generale.

“Everyone is trying to get ready to connect, even if the timeline is very aggressive,” said Loiseau, whose bank has a big group of staff working on the project.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza