HKEX release three-year strategy, bourse to launch A-shares futures

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Hong Kong Exchanges and Clearing Ltd (HKEX) said it would launch A-shares futures products to support hedging of Chinese shares by international investors and would enhance its stock and bond connect schemes to give mainland investors access to Hong Kong initial public offerings (IPOs) and bonds in its three-year strategy published on Thursday.

The stock connect, launched in 2014, and bond connect, launched in 2017, give international investors access to mainland Chinese markets via the Hong Kong exchange, and Chinese investors access to Hong Kong's capital markets.

A banner introducing the Shanghai-Hong Kong Stock Connect. /VCG Photo

HKEX said it would prepare to launch southbound trading via its bond connect to let mainland-based investors trade Hong Kong bonds.

Shares in the bourse operator were trading as much as 0.6 percent higher on Thursday morning, compared with a 0.1 percent fall in the benchmark Hang Seng Index.

Attract listings from Asia-Pacific firms

HKEX would look to attract more companies from the Asia-Pacific region to list in Hong Kong and expand its stock and bond connect schemes linking mainland China with global markets.

In its three-year strategy, HKEX said its aim was to increase its international relevance to the mainland and Asia, and its Asia relevance to the global markets.

The new plan marks a change from the bourse's previous strategy which was focused primarily on connecting international investors and the Chinese mainland.

Currently, the bulk of stocks that can be traded in or through Hong Kong are those of Greater China-focused companies, but the bourse said it would change its listing regime to better attract Asia-Pacific companies, and work to become an exchange-traded fund (ETF) issuance and trading hub in Asia.

Pursue measures to shorten IPO settlement cycle

In Hong Kong, HKEX will look to shorten the IPO settlement cycle, the five-day period between the end of an IPO and the company's start of trade, a major risk identified by investment banks and other market participants concerned about market-moving news occurring in the intervening period.

Source(s): Reuters