Shanghai-Hong Kong Stock Connect: Project 5 years ago inaugurates financial center's new era

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The opening of the Shanghai London Stock Connect comes almost five years after the first connect scheme began with Hong Kong. CGTN's Joel Flynn has more for us on how that initiated a new era in the financial centre's history.

In the almost 130 years of Hong Kong's stock exchange history, November 2014 may well go down as one of the most important dates. That was when the city's famous gong sounded in the opening of its first Stock Connect scheme with Shanghai.

"To the success of the Shanghai-Hong Kong stock connect."

In the years since then, more than 2,000 equities have become connected by the programs Hong Kong has with Shanghai and Shenzhen. The goal was for Hong Kong to play a unique role in helping open up China's markets - helping both benefit from incoming global capital.

CHUNG-KONG CHOW FORMER HKSE CHAIRMAN "The Connect Program will further strengthen Hong Kong's position as an international financial centre."

Five years on, MSCI inclusion and a growing reputation have all helped raise the profile of the Connect programs.

HONG HAO, HEAD OF RESEARCH BOCOM INTERNATIONAL HOLDINGS "Since 2017 when the prospect of international indexation inclusion is being raised, then I think people started to look at especially the onshore market more closely."

It has taken time for investors to trust those programs though. Daily quotas are currently 51 billion yuan for northbound trade and 42 billion for money coming south. Those limits have rarely been hit, with typical days often touching only a few percentage points of those quotas. Despite this, some at the time remained unconcerned about those trading amounts.

CHUNG-KONG CHOW FORMER HKSE CHAIRMAN "And as long as Chinese citizens cumulating their wealth want to invest in offshore investments to increase their prosperity, the volume will be there."

There have also been some concerns about technical challenges and about foreign access to Chinese holdings in times of crisis. Despite all of this though, many analysts say that Stock Connect is still widely seen as a success for investors and for the stock exchanges themselves.

HONG HAO, HEAD OF RESEARCHBOCOM INTERNATIONAL HOLDINGS "The accomplishments of the Connect scheme have actually beaten all expectations. So given that five years later it would be difficult to forecast how much further it could go, but with the Chinese financial market reform deeper and deeper, I would say the potential is just huge."

JOEL FLYNN HONG KONG "Five years ago Hong Kong saw itself as a pioneer in helping open up global access to Chinese stock markets. As many look to new programs in London, and possibly beyond, the stock exchange here will hope its success that helps guarantee its own future."