Welcoming Market Access Measures
The Hong Kong government enthusiastically welcomed the steps announced by the China Securities Regulatory Commission (CSRC) today to increase collaboration between the Mainland and Hong Kong’s financial markets.
The measures include: expanding the eligible product scope of equity exchange-traded funds (ETFs) under Stock Connect; including real estate investment trusts (REITs) under Stock Connect; supporting the inclusion of the renminbi stock trading counter under the Southbound trading of Stock Connect; enhancing the arrangements for mutual recognition of funds; and encouraging leading enterprises of industries in the Mainland to list in Hong Kong.
Chief Executive John Lee stated that these measures are important steps to help Hong Kong’s financial markets grow further, offer more appealing investment options, create more investment opportunities for local, Mainland, and international investors, and strengthen Hong Kong’s position as a hub for offshore Chinese currency (RMB) business.
Mr. Lee highlighted a statement by Xia Baolong, Director of the CPC Central Committee’s Hong Kong & Macao Work Office and the State Council’s Hong Kong & Macao Affairs Office, made on National Security Education Day. Xia Baolong said that whenever Hong Kong seeks assistance, the mainland will definitely respond. He emphasized that no matter the challenges Hong Kong faces, the mainland’s support will only grow stronger.
“The Hong Kong SAR Government will continue improving Hong Kong’s financial markets to make them more competitive, actively supporting our country’s development as a financial center, maintaining our international characteristics, and boosting growth momentum.”
Financial Secretary Paul Chan also mentioned that each of these measures will strengthen Hong Kong’s role in connecting Mainland China and international capital markets. This will enhance Hong Kong’s ability to attract capital and high-quality enterprises from both directions, offer more investment options for Mainland and international investors, and support the steady progress of offshore Chinese currency (RMB) internationalization.
He mentioned that the country’s support for major Mainland enterprises listing in Hong Kong will benefit the city’s initial public offering (IPO) market. Having more listed companies with long-term growth potential in Hong Kong will also boost the development of the secondary market.
Expanding the range of investment products available through mutual market access will provide more options for domestic, Mainland, and overseas investors, making it easier for them to allocate their assets. This will attract more capital to both the Mainland and Hong Kong markets and support long-term market growth.
Allowing Mainland investors to trade Hong Kong stocks using Chinese currency (RMB) through the Southbound trading of Stock Connect will enhance the offshore investment function of RMB.
Mr. Lee and Mr. Chan expressed gratitude to the Central People’s Government for its strong support for Hong Kong. The financial chief stated that the Hong Kong SAR Government will work closely with relevant Mainland ministries and institutions to implement these measures promptly.
Additionally, they will swiftly carry out supporting measures, such as waiving stamp duty on the transfer of REIT (Real Estate Investment Trust) units, extending the Grant Scheme for Open-ended Fund Companies & Real Estate Investment Trusts, and improving the regulatory framework for collective investment schemes and REITs.
