(Adds official comments, context)
By Michelle Chen
HONG KONG, Aug 27 (Reuters) – Shenzhen is studying a plan to
connect its stock exchange with Hong Kong’s stock market,
similar to the scheme planned for Shanghai, and hopes it can be
launched as soon as possible, a government official said on
“The Shenzhen government has raised this suggestion to the
China Securities Regulatory Commission and the CSRC’s opinion is
that we can do some research on the Shenzhen-Hong Kong stock
connect plan,” Xiao Zhijia, deputy director-general of
Shenzhen’s Office of Financial Development Services, told
Reuters by telephone.
The plan will then need to be discussed with Hong Kong’s
stock exchange and the city’s regulators following which China’s
regulators will then decide when to launch a similar scheme
between Shenzhen and Hong Kong, he said.
He declined to give a specific time frame for the launch
saying it depended on the success of the Hong Kong-Shanghai
“It is quite flexible and the power of decision is in the
CSRC’s hands,” he said.
The Shenzhen stock exchange, a rival to Shanghai’s market,
looks to emulate the Nasdaq in the United States by focusing on
companies in their early growth stages. It also has some
big-name listings, including China Vanke, the
country’s biggest residential property developer.
Shenzhen stocks, in particular those on the ChiNext
board, have consistently outperformed the Shanghai
Exchange which has concentrated on listing large-cap blue chip
firms in recent years.
A foreign fund manager, speaking on condition of anonymity,
said that he believed foreign investors would be far more
enthusiastic about investing in Shenzhen companies, which tend
to feature more technology and consumer names.
These stocks represent the future of China’s economy rather
than the blue-chip banks, insurers, and other state-owned giants
that dominate Shanghai’s index, according to some investors.
Authorities expect the landmark stock-connect programme
between Shanghai and Hong Kong – another step in China’s efforts
to open up its markets – will launch in October. Regulators and
market participants are racing to test mechanisms to ensure
While China investors anticipate a wave of institutional
money will flow into the mainland’s relatively undervalued
markets, Hong Kong stock punters are hoping Chinese money will
boost trading volumes and lift stocks.
The Shanghai Composite Index rose to eight-month highs last
week, and Hong Kong’s Hang Seng Index reached a more than
six-year high this week as investors hailed the latest
development as a catalyst for further market gains.
A Shenzhen-Hong Kong connection hinges on the success of the
Shanghai-Hong Kong link, an analyst told Reuters, who expected
such a scheme to be launched in the first quarter of 2015 at the
(Additional reporting by Grace Li and Saikat Chatterjee in HONG
KONG and Pete Sweeney in BEIJING; Editing by Richard Borsuk and
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