Hong Kong and Shenzhen stock exchange will start cross trading

Гонконгская и Шэньчжэньская фондовые биржи запустят перекрестные торги

Hong Kong and Shenzhen stock exchanges on Monday will launch the long awaited cross trading mechanism of the Shenzhen — Hong Kong Connect, which is expected brokers will help to improve the market turnover, investor sentiment and add to the liquidity of both trading venues.

Shenzhen — Hong Kong Connect is a mechanism that allows international investors from Hong Kong and investors from mainland China to access trading in securities placed on the Hong Kong and Shenzhen stock exchanges.

A new scheme of trading was to earn at the end of last year, but due to sales on stock market in mainland China has been postponed to a later date. In mid-August, the Premier of the state Council of China Li Keqiang officially announced the approval of cross trading of the stock exchanges of Hong Kong and Shenzhen. The Commission on regulation of securities market of China (China Securities Regulatory Commission, CSRC) on November 25 announced that the auction will be officially launched on 5 December. Similar cross-trading began in November 2014, between Shanghai and Hong Kong stock exchanges — Shanghai — Hong Kong Stock Connect.

As reported by Hong Kong newspaper South China Morning Post, after Monday morning will be launched bidding, international investors can trade shares 881 companies listed on Shenzhen stock exchange. With daily trading quota will be 13 billion yuan. Meanwhile, investors in mainland China will have access to the stock trading 417 of the companies posted on the Hong Kong stock exchange, with a daily trading quota of 10.5 billion yuan.

Brokers expect that the mechanism of cross trading will help market circulation, will improve market sentiment and will add liquidity to both exchanges. The Commission on regulation of securities market of China in turn stated that cross-trading will help the common development of the capital market of the special administrative region of Hong Kong and mainland China.

According to the World Federation of Exchanges, published in the media, the Shenzhen stock exchange is the seventh largest in the world stock exchange. By may 2016, its market capitalization amounted to 3.16 trillion, slightly more than the Hong Kong exchange (3.1 trillion dollars) but less than the Shanghai stock exchange (3,87 trillion dollars).

Currently Shenzhen stock exchange listed shares of the company in 1848, of which about a fifth of the are technology. According to Western media, cross trading mechanism open to foreign investors a new way to share Chinese technology companies to access easy.

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