The London-Shanghai Stock Connect has gone live providing international investors access China A-shares without the need for a direct trading link.
Companies listed in Britain will be able to sell shares in China on Monday with the launch of a long-awaited London-Shanghai Stock Connect project that finance minister Philip Hammond called a chance to deepen “global connectivity”.
Under the Connect scheme, Shanghai-listed companies can raise new funds via London’s stock market while British companies can broaden their investor base by selling existing shares in Shanghai.
The project was intended to begin late last year with the December listing of Chinese brokerage Huatai, backed by Alibaba Group Holding Ltd. But the listing was delayed at the last minute.
Huatai Securities Co Ltd then effectively launched Connect earlier this month with the announcement of plans to raise money on the London Stock Exchange (LSE).
Huatai, one of China’s largest brokerages, is expected to make its London market debut on June 17, becoming the first company to trade via the London-Shanghai Stock Connect project.
“The new scheme also will deepen and strengthen connectivity between UK and China capital markets to the advantage of both countries,” said Andrew Bailey, chief executive of the UK’s Financial Conduct Authority (FCA). “We both believe in the positive contribution regulators can make in international capital markets, and the new co-operation were announcing today will be an important contributor to the success of the scheme.”
Both the FCA and the China Securities Regulatory Commission (CSRC) added that for institutional investors based in the UK, the Stock Connect scheme will offer exposure to China A-shares which previously required a qualified foreign investor status. At the same time, Chinese investors will see exposure to international securities via the SSE and in their own currency.
From Monday, London investors will have the opportunity to trade Global Depositary Receipts in Huatai.
The CBI commented on the London – Shanghai Stock Connect which will see UK listed firms become the first foreign companies to be able to list in mainland China
“We warmly welcome the creation of the London-Shanghai Stock Connect. It is a ground-breaking step that will give tremendous new opportunities to grow to investors and businesses in both the UK and China.
“The Sino-British relationship is a tremendous success story, and our firms are keen to play their part in further deepening and engraining our economic ties. As the UK charts a new course with its global trading partners, the Stock Connect is a timely sign that we are open for business, and that our world beating financial services sector must be at the heart of that new future.”
Guy Dru Drury MBE, CBI Head of China said
Editor: J Ping Source: Reuters and online