Source: Securities Times
Author: Roman
On June 5, Kuaishou issued an announcement stating that the company's newly launched RMB counter will take effect on June 19, 2023. The newly launched RMB counter will provide shareholders and potential investors with more investment flexibility and stock liquidity.
The Hong Kong Stock Exchange announced today that with reference to the notice issued by the exchange on May 19, following the successful completion of the end-to-end testing session up to June 2 and the internship sessions on May 27 and June 3, the dual counter model will be officially launched on June 19. As of the date of this announcement, 21 securities have been designated by the exchange as dual-counter securities, effective from the introduction of the dual-counter model.
In addition, 9 institutions have obtained dual counter bookmaker (DCMM) licenses. These 9 institutions can carry out bookmaker activities or provide liquidity activities after the introduction of the dual counter model. These nine double-counter bookmakers include Bank of China International, CICC International, CITIC Lyon, Guotai Junan, etc.
On the same day, the Chief Executive of the Hong Kong Securities Regulatory Commission, Leung Fung-yee, said at the Hong Kong Investment Funds Association that the first batch of companies involved in double-counter trading were all leading listed companies, accounting for 40% of the daily trading volume of the stock market. Listed investment funds, ETFs, and real estate trusts are also eligible to set up additional RMB counters. Furthermore, the Hong Kong Securities Regulatory Commission is cooperating with the China Securities Regulatory Commission to include the RMB counter in the Hong Kong Stock Connect.
She also pointed out that now is a good time to introduce renminbian-denominated stocks to be included in the Hong Kong stock market southbound, because the cost of RMB financing is lower than the US dollar under the US interest rate hike. She mentioned that the transaction volume in the first four months of this year was low, but the situation had improved as of June. The Hong Kong Securities Regulatory Commission will increase market appeal in many ways in the future, including increasing the listing of different products and companies.
Leung Fung-yee said, “The development of renminbian-denominated products is the main task of the Hong Kong Securities Regulatory Commission. These products are indispensable for the internationalization of the RMB, and Hong Kong occupies an important place among them. Hong Kong enjoys many advantages in RMB capital pools, types of investment products and derivatives, and market infrastructure. We will promote the trading of RMB denominated securities and the development of risk management instruments such as RMB derivatives, and seek to strengthen Hong Kong's leading position as an offshore RMB hub.”
Hong Kong has huge room for future development and will vigorously promote market connectivity between the two places
Hong Kong's Financial Secretary Chan Mao-po said that Hong Kong will implement renminbi-denominated stock trading in the next few months, which will also push for southbound stock exchanges to be included in RMB denomination, help the internationalization of the RMB while seeking its own development, and contribute to the country's high-quality development. He also pointed out that the market value of the Hong Kong stock market accounts for about 28% of China's gross domestic product, while the combined market capitalization of the US New York Stock Exchange and the NASDAQ Exchange is about 170% of the gross domestic product of the United States. It can be seen that Hong Kong has a lot of room for development.
Chen Maobo also said that Hong Kong is a small economy with only 7.3 million people. As of today, it has developed into an international financial center, inseparable from the country's steady support, while also benefiting from the rapid growth of the mainland's huge hinterland over the past few decades.
The Hong Kong stock market, on the other hand, is a good example of seeing development. In 1997, the market value of the Hong Kong stock market was only over 3 trillion yuan, about twice the GDP (gross domestic product). By March 2023, the market value of the Hong Kong stock market was about 37 trillion yuan, 13 times the GDP. Currently, the market value of the Hong Kong stock market accounts for only about 28% of the country's GDP. In addition to the Shenzhen Stock Exchange and Shanghai Stock Exchange, they also only account for about 98% of the country's GDP; while in the US, the combined market capitalization of the New York Stock Exchange and the NASDAQ Exchange is about 170% of the US GDP. The country is developing rapidly, and Hong Kong has plenty of room for development.
Chen Maobo believes that in the future, Hong Kong will vigorously promote the interconnection of the two markets. On the one hand, it is seeking development for itself, and on the other hand, it is also helping to steadily advance the internationalization of the RMB. Furthermore, Hong Kong needs to look internationally and explore more new markets, including the Middle East and Southeast Asia.
Editor/Somer