Wednesday November 23 2016
News Source: Global Exchanges
Focus: Other
Type: General
It has been reported that there may be a delay in the launch of the Shenzhen-Hong Kong Stock Connect as concerns mount over capital outflows on the back of a weaker yuan. Onshore yuan has fallen nearly 2 percent against the dollar since the 8th November and whilst a weaker yuan theoretically helps China by making exports cheaper, the benefits have been overshadowed by concerns over capital outflows. A weaker yuan also reduces purchasing power of consumers in the global market by making goods and services in other currencies more expensive.
There has been speculation that the Stock Connect could launch either 5th or 12th December, however, thus far there has been no official announcements from either Hong Kong or mainland China regulators.
The new Stock Connect will be similar to the existing Shanghai-Hong Kong Stock Connect, which was launched in late 2014. Investors in Hong Kong will be able to buy Shenzhen-listed stocks, including many prominent technology and consumer names in the mainland. In return, Chinese investors will have access to shares listed in Hong Kong.
This information will be updated as soon as further details become available.