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Beijing sets 20b yuan shares quota for HK investors
By Lydia Chen |
August 17, 2011, Wednesday
|
Online Edition
Online Edition
CHINA today pledged a 20 billion yuan (US$3.1 billion) quota for qualified Hong Kong investors to buy yuan-denominated shares while mainland investors can also buy shares in the territory via an exchange-trade fund.
The new policy is among a raft of gifts brought to Hong Kong by visiting Vice Premier Li Keqiang, who also promised to expand the offshore yuan-dominated bond sales and further open up the mainland markets to Hong Kong firms.
The measures could help Hong Kong further boost its reputation as a global financial center at a time when its economy showed signs of contraction in the second quarter.
China, the world's second largest economy, also needs Hong Kong to promote the use of its currency to reduce its dependence on the dollar, which is likely to weaken further after the US Federal Reserve decided to keep its interest rates at record lows through mid-2013.
Qualified foreign institutional investors "will be allowed to invest in the mainland securities market with an initial input of 20 billion yuan," Li said in a televised seminar in Hong Kong this morning.
"Pilot projects will be under way for foreign banks to replenish capital with renminbi and support will be given to Hong Kong firms for making direct RMB investment in the mainland," said Li, who is having a three-day visit to the special administrative region.
Investors on the mainland will also have chance to buy shares in the Hong Kong Stock Exchange through the planned ETF platform, Li said.
"The state will continue to encourage more mainland firms to go public in Hong Kong and allow Hong Kong banks to sell the ETF via their mainland outlets," Li added.
Hong Kong officials have been lobbying the central government since early 2007 to allow Chinese nationals to buy assets, including stocks, in Hong Kong. In November 2007, Beijing concluded that it should hold off the so-called "through-train" plan indefinitely.
The "through-train" plan was unveiled in August 2007 to allow Chinese citizens to buy Hong Kong shares directly. It led the benchmark Hang Seng Index to a record high that October.
The new policy is among a raft of gifts brought to Hong Kong by visiting Vice Premier Li Keqiang, who also promised to expand the offshore yuan-dominated bond sales and further open up the mainland markets to Hong Kong firms.
The measures could help Hong Kong further boost its reputation as a global financial center at a time when its economy showed signs of contraction in the second quarter.
China, the world's second largest economy, also needs Hong Kong to promote the use of its currency to reduce its dependence on the dollar, which is likely to weaken further after the US Federal Reserve decided to keep its interest rates at record lows through mid-2013.
Qualified foreign institutional investors "will be allowed to invest in the mainland securities market with an initial input of 20 billion yuan," Li said in a televised seminar in Hong Kong this morning.
"Pilot projects will be under way for foreign banks to replenish capital with renminbi and support will be given to Hong Kong firms for making direct RMB investment in the mainland," said Li, who is having a three-day visit to the special administrative region.
Investors on the mainland will also have chance to buy shares in the Hong Kong Stock Exchange through the planned ETF platform, Li said.
"The state will continue to encourage more mainland firms to go public in Hong Kong and allow Hong Kong banks to sell the ETF via their mainland outlets," Li added.
Hong Kong officials have been lobbying the central government since early 2007 to allow Chinese nationals to buy assets, including stocks, in Hong Kong. In November 2007, Beijing concluded that it should hold off the so-called "through-train" plan indefinitely.
The "through-train" plan was unveiled in August 2007 to allow Chinese citizens to buy Hong Kong shares directly. It led the benchmark Hang Seng Index to a record high that October.
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