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Business / Markets

'Through train' on track for October, chief says

By Emma Dai in Hong Kong (China Daily) Updated: 2014-08-07 07:14

The Hong Kong Shanghai Stock Connect program will launch on a Monday early in October after China's National Day holiday, the head of the stock exchange in Hong Kong said on Wednesday.

"It's not up to the exchange but to the regulators to announce the date," said Charles Li, chief executive of Hong Kong Exchanges and Clearing Ltd, which operates the city's stock exchange, the world's largest by market capitalization.

"But we are not going to be completely ready until October. We do not want the National Day, a major holiday, coming right after the initiative. We would also not want any day other than Monday as we'd like to have the whole weekend for last-minute testing.

"By early October, nothing should stand between us and the launch," he added. "The regulators will make the announcement probably two weeks beforehand to notify the market."

National Day, which falls on Oct 1, is scheduled to start a holiday this year that runs until Oct 7.

That leaves only three Mondays in the month, which are Oct 13, 20 and 27.

Trading on the Chinese mainland's A-share market will be suspended during the holiday and resume on Oct 8.

The Hong Kong market will take only Oct 1 and 2 off.

The Shanghai Hong Kong Stock Connect was announced on April 10, at which point officials said it would launch within six months.

The arrangement, also known as the "through train", will allow all overseas investors to buy Shanghai-listed companies. It also establishes a channel for mainland institutions as well as retail investors with at least 500,000 yuan (about $81,000) in their accounts to trade equities listed in Hong Kong.

However, with just two months until the program starts, Li stressed that a smooth launch is more important than a "big bang".

"This is not a one-time product, but a progressive evolution. It's the first step ... a long-term investment structure. Lots of progress will continue to be made over the years. We just want to make sure the kickoff is done properly," Li told a news briefing.

"Elements of the 'connect' will continue to be improved, perfected and expanded. Participants are welcome to join the scheme whenever they are ready.

"At the beginning, we will be quite happy if the trading is not massive. We don't want it to be overwhelmed. People have good reason to examine whether to participate and the best way to leverage it. Take your time. Don't rush it," Li said.

He estimated that investors will enter the A-share market in waves. First will be people already participating existing programs that provide overseas institutions with access to the Chinese capital markets.

As investors become more sophisticated and their interest grows with their understanding of the market, more are expected to come.

'Through train' on track for October, chief says

'Through train' on track for October, chief says

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