3 stock exchanges set to form JV
By Richard Fu |
June 29, 2012, Friday
|
Print Edition
Print Edition
HONG Kong Exchanges & Clearing Ltd agreed to form a joint venture with its counterparts in Shanghai and Shenzhen yesterday, part of China's efforts to boost ties between the city and the mainland.
The new venture by HKEx, the Shanghai Stock Exchange and the Shenzhen Stock Exchange will develop index-linked and other equity derivatives products. Each partner will contribute HK$100 million (US$12.89 million) as paid-up capital in the new company, which may be set up in three months in Hong Kong.
The new venture will help promote the development of China's capital markets, enhance the competitiveness of these markets and promote the internationalization of the three bourses, HKEx said.
Yesterday's pact came just one day after China unveiled a package of policies to boost economic and cultural ties between Hong Kong and the mainland and on the eve of the 15th anniversary of the city's return to China.
President Hu Jintao arrives in Hong Kong today for the celebrations.
HKEx Chief Executive Charles Li said further integration of exchanges will enhance trading at the three bourses.
HKEx is seeking to grow by offering more yuan-denominated and mainland-related products to counter slower initial public offerings from mainland companies. HKEx earlier this month said it agreed to pay US$2.2 billion for the London Metal Exchange, the world's largest marketplace for industrial metals, of which China is the largest consumer.
The new venture aims to launch a series of cross-border indices within the year, with futures and options on the indices to be traded on HKEx in 2013. The venture also aims to be a "sustainable vehicle" for developing offshore A share-related products, HKEx said.
Hong Kong wants to retain its role as a key offshore yuan trading hub while China could use more yuan-related products in the city to help its ambition to make the yuan a global currency in the long run.
"As China continues to open up and the (yuan) gradually internationalizes, it is inevitable we will have to compete in the international capital market. Our efforts in further cooperation with HKEx and develop products for the offshore market will bring about a win-win situation for both Hong Kong and the mainland," said Zhang Yujun, president of the Shanghai exchange.
The new venture by HKEx, the Shanghai Stock Exchange and the Shenzhen Stock Exchange will develop index-linked and other equity derivatives products. Each partner will contribute HK$100 million (US$12.89 million) as paid-up capital in the new company, which may be set up in three months in Hong Kong.
The new venture will help promote the development of China's capital markets, enhance the competitiveness of these markets and promote the internationalization of the three bourses, HKEx said.
Yesterday's pact came just one day after China unveiled a package of policies to boost economic and cultural ties between Hong Kong and the mainland and on the eve of the 15th anniversary of the city's return to China.
President Hu Jintao arrives in Hong Kong today for the celebrations.
HKEx Chief Executive Charles Li said further integration of exchanges will enhance trading at the three bourses.
HKEx is seeking to grow by offering more yuan-denominated and mainland-related products to counter slower initial public offerings from mainland companies. HKEx earlier this month said it agreed to pay US$2.2 billion for the London Metal Exchange, the world's largest marketplace for industrial metals, of which China is the largest consumer.
The new venture aims to launch a series of cross-border indices within the year, with futures and options on the indices to be traded on HKEx in 2013. The venture also aims to be a "sustainable vehicle" for developing offshore A share-related products, HKEx said.
Hong Kong wants to retain its role as a key offshore yuan trading hub while China could use more yuan-related products in the city to help its ambition to make the yuan a global currency in the long run.
"As China continues to open up and the (yuan) gradually internationalizes, it is inevitable we will have to compete in the international capital market. Our efforts in further cooperation with HKEx and develop products for the offshore market will bring about a win-win situation for both Hong Kong and the mainland," said Zhang Yujun, president of the Shanghai exchange.
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