As anticipated, regulators have extended cross-border links between Hong Kong and mainland China’s markets.
The China Securities and Regulatory Commission (CSRC) has expanded the «Stock Connect» scheme between Hong Kong and the mainland. According to a statement by the Securities and Futures Commission (SFC), this includes relaxed eligibility of exchange-traded funds in the scheme alongside the inclusion of real estate investment trusts and yuan-denominated stocks in the southbound channel.
To further boost Hong Kong’s attractiveness as a financial center, regulators will also look to enhance the mutual recognition of funds between the two markets and support the listing of mainland firms in the city.
15-Year Low
The new measures could be a much needed boost for Hong Kong which is undergoing a deals slump. According to Deloitte, initial public offerings (IPO) in the city hit a 15-year low in the first quarter of 2024 after 12 companies raised just HK$4.7 billion ($600 million).
«We are […] grateful for the CSRC’s continuous efforts in facilitating a smooth fundraising channel for mainland companies to seek listing in Hong Kong, in particular, its support for leading mainland companies to list in Hong Kong,» said SFC CEO Julia Leung. «This will enhance the attractiveness of Hong Kong’s IPO market and the liquidity of the secondary market.»
