A long-delayed stock-trading link between the Chinese city of Shenzhen and Hong Kong was launched today, another step in China's efforts to open up its market and enable foreigners to trade shares in over 800 firms.
The Shenzhen-Hong Kong Stock Connect, the second link between mainland China and Hong Kong bourses, was supposed to launch at the end of last year, but was delayed due to Chinese market volatility.
Ceremonies were held simultaneously today at Hong Kong and Shenzhen bourses via video link as Hong Kong Exchanges and Clearing Chairman Chow Chung-kong and Hong Kong Chief Executive Leung Chun-ying jointly beat a gong to mark the launch.
This is the second link of its kind to boost opening up of mainland's capital market after a similar link between the Shanghai and Hong Kong bourses was launched in 2014.
The new scheme is aimed at giving global investors stocks in the tech-heavy Shenzhen market via Hong Kong bourse, state run-Xinhua news agency reported.
Leung said at the ceremony that the launch indicated the interconnection between capital markets in Hong Kong and Shenzhen "has entered a new stage".
Following the Shanghai-Hong Kong Stock Connect, the Shenzhen-Hong Kong Stock Connect will bring more opportunities for both institutional and individual investors in the two bourses, with the advantages of Hong Kong's "one country, two systems" formula, he said The link was to have been launched last year, but was put off due market volatility in China.
Shenzhen has been promoted as a hub for technology and its stock market has been linked to the US-based Nasdaq.
With monthly turnover of more than USD one trillion, Shenzhen is regarded as Asia's busiest exchange as per the World Federation of Exchanges data.
This is also part of China's efforts to to open up its USD 6.5 trillion equity markets to foreign investors.
Just after the start of trading, 193 million yuan worth of northbound trades were made, while 108 million yuan worth of southbound trades were recorded, Hong Kong based South China Morning Post reported.
However, the Shenzhen-Hong Kong debut had a more subdued start than the Shanghai connect scheme, which saw 50 per cent higher volumes during its launch on November 17, 2014, it said.
The new connect scheme is another milestone for mutual market access, Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia said at the launch ceremony.
"If Shanghai-Hong Kong Stock Connect is a baby step, the Shenzhen-Hong Kong is the second step. Now we can walk, and then we can run," Li said.
Hong Kong's Chief Executive Leung Chun-ying said the new connect included Shenzhen stocks for international investors, while expanding the list of Hong Kong stocks available for mainlanders to invest in.
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