Exchanges talk venture on derivative products
Source: Bloomberg News |
00:25 UTC+8 August 19, 2011
|
Print Edition
Print Edition
HONG Kong Exchanges & Clearing Ltd, the world's most valuable exchange company, yesterday said it's in venture talks with the Chinese mainland's two stock exchanges a day after Vice Premier Li Keqiang unveiled plans to boost cross-border investment.
The company is discussing the development of new indexes and other derivative products with the Shanghai and Shenzhen bourses, Hong Kong Exchanges said in a statement yesterday. The venture may be based in Hong Kong, it said.
China will start an exchange-traded fund linked to Hong Kong equities and boost quotas from qualified companies to invest in its own share market, Li said on a visit to Hong Kong on Wednesday.
"The derivative market in China is still at its infancy stage and can certainly leverage Hong Kong Exchanges' expertise and Hong Kong Exchanges needs new sources of growth," said Victoria Mio, a Hong Kong-based fund manager at Robeco Hong Kong Ltd, whose parent oversees US$200 billion in assets globally.
The bourse's Chief Executive Officer Charles Li is forging closer ties with the mainland and hopes to attract its investors. The exchange hosted the first yuan-denominated initial public offering outside of the mainland this year and is preparing for dual-currency listings to take advantage of the mainland's plans for financial liberalization and its promotion of the yuan in global trade and investment.
"This is going in the right direction for both Chinese mainland and Hong Kong - for the mainland to open itself, and also for Hong Kong to get more business and money flow from mainland investors," said Alex Au, managing director of Richland Capital Management Ltd in Hong Kong. If the mainland believes the ETF product is "successful and within their control, they can roll out this product into broader areas, and eventually to other countries' stocks as well," he said.
No binding agreement has been reached, the Hong Kong bourse said. Shanghai Stock Exchange spokesman Chen Ji declined to comment. Officials at Shenzhen Stock Exchange couldn't immediately be reached for comment.
"Hong Kong Exchanges doesn't have further details now as the discussion has just begun," said Scott Sapp, a company spokesman.
The company is discussing the development of new indexes and other derivative products with the Shanghai and Shenzhen bourses, Hong Kong Exchanges said in a statement yesterday. The venture may be based in Hong Kong, it said.
China will start an exchange-traded fund linked to Hong Kong equities and boost quotas from qualified companies to invest in its own share market, Li said on a visit to Hong Kong on Wednesday.
"The derivative market in China is still at its infancy stage and can certainly leverage Hong Kong Exchanges' expertise and Hong Kong Exchanges needs new sources of growth," said Victoria Mio, a Hong Kong-based fund manager at Robeco Hong Kong Ltd, whose parent oversees US$200 billion in assets globally.
The bourse's Chief Executive Officer Charles Li is forging closer ties with the mainland and hopes to attract its investors. The exchange hosted the first yuan-denominated initial public offering outside of the mainland this year and is preparing for dual-currency listings to take advantage of the mainland's plans for financial liberalization and its promotion of the yuan in global trade and investment.
"This is going in the right direction for both Chinese mainland and Hong Kong - for the mainland to open itself, and also for Hong Kong to get more business and money flow from mainland investors," said Alex Au, managing director of Richland Capital Management Ltd in Hong Kong. If the mainland believes the ETF product is "successful and within their control, they can roll out this product into broader areas, and eventually to other countries' stocks as well," he said.
No binding agreement has been reached, the Hong Kong bourse said. Shanghai Stock Exchange spokesman Chen Ji declined to comment. Officials at Shenzhen Stock Exchange couldn't immediately be reached for comment.
"Hong Kong Exchanges doesn't have further details now as the discussion has just begun," said Scott Sapp, a company spokesman.
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