Source: Securities Times.
Author: Zhang Shuxian

On November 26, the hkex held the second HKEX China Forum in shanghai. In her speech, hkex CEO bonnie chan yi-ting revealed that companies already listed on the A-shares, if meeting certain conditions, can enter a fast approval process when applying for listing on the hkex.

Nearly 77% of foreign capital holds mainland stocks through the Shanghai, Shenzhen, and Hong Kong Stock Connect programs.

On November 17, 2014, the first train of China's capital markets opening both ways—the Shanghai-Hong Kong Stock Connect—was launched between Shanghai and Hong Kong, ushering in a new era of interconnection between the mainland and Hong Kong capital markets. This year marks the tenth anniversary of the mutual market access between the two regions.

Bonnie Chan Yi-ting stated that over the past decade, the operation of the mutual market access mechanism between mainland China and Hong Kong has been smooth, with the investment scope continuously expanding. From the Shanghai-Hong Kong Stock Connect extending to the Shenzhen-Hong Kong Stock Connect, and further to the Bond Connect and Cross-border Investment Pilot Scheme, the services have continued to optimize and upgrade. Trading activity has increased, bringing benefits to both the Hong Kong and mainland markets.

Taking the Shanghai, Shenzhen, and Hong Kong Stock Connect programs as an example, as of the end of September this year, the cumulative turnover for Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programs over the past decade has reached 177 trillion yuan. In the first ten months of this year, the daily turnover of the Shanghai, Shenzhen, and Hong Kong Stock Connect programs and Hong Kong Stock Connect reached 136.3 billion yuan and 43.9 billion Hong Kong dollars, accounting for 7.3% and 17.2% of the total turnover of mainland China and Hong Kong stock markets, respectively.

"The mutual market access not only vigorously promotes the further opening up of the mainland capital markets and the internationalization of the RMB, but also consolidates Hong Kong's position as an international financial center and a super connector," said Bonnie Chan Yi-Ting. "Currently, the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect have become the main channels for international investors to trade and hold A-shares, with nearly 77% of foreign capital holding mainland stocks through this channel."

Bonnie Chan Yi-Ting also revealed that since the launch of the Bond Connect in 2017, the number of overseas investors entering the market has reached 830 in just a few years. The Bond Connect Northbound Channel has also become the main channel for international capital to invest in the mainland bond market. Over half of international investors' transactions in the mainland bond market are conducted through the Bond Connect.

Multiple measures to optimize mutual market access are being pushed forward.

On April 19 this year, the China Securities Regulatory Commission announced five capital market cooperation measures with Hong Kong, including further expanding the scope of stock ETF qualified products under the Shanghai-Hong Kong Stock Connect, including REITs in the Shanghai-Hong Kong Stock Connect, supporting RMB stock trading counters to enter the Hong Kong Stock Connect, and supporting leading mainland industry companies to list in Hong Kong.

Bonnie Chan Yi-Ting disclosed that in July this year, the expansion of ETFs under the Shanghai-Hong Kong Stock Connect has been smoothly implemented. The preparation work for other optimization measures under mutual market access is also proceeding intensively.

"Currently, we are closely cooperating with the Shanghai and Shenzhen Stock Exchanges on the inclusion of REITs in the Shanghai-Hong Kong Stock Connect, the introduction of block trading mechanisms, and the inclusion of RMB counters in the Hong Kong Stock Connect trading," said Bonnie Chan Yi-Ting. "We hope to implement these optimizations as soon as possible to provide more investment choices and convenience for domestic and foreign investors."

"In Bonnie Chan Yi-Ting's view, as China's influence in the global economy and low-carbon transformation continues to rise, China's capital markets can provide greater investment opportunities for the world. There is still significant room for increasing the proportion of international investors' investments in the mainland capital markets, therefore the mutual market access mechanism still has enormous untapped potential."

"In the future, the Hong Kong Stock Exchange will continue to work together with mainland partners and all parties in the market to continuously expand and optimize the mutual market access mechanism, enrich our products and services, connect China with the world, and link capital with opportunities," said Bonnie Chan Yi-Ting.

HKEX introduces a series of listing rule reforms.

In addition to optimizing mutual access, HKEX has recently launched a series of listing rule reforms and market reforms to enhance the vitality and international competitiveness of the Hong Kong market.

"In the first half of this year, the market has been in a continuous slump, and it is not easy for technology companies to meet the market capitalization requirements in the Listing Rules," said Bonnie Chan Yi-ting. "Therefore, in August this year, we announced a temporary reduction in the market cap threshold for listing technology companies under Chapter 18A, and also relaxed the independent third-party investment requirements for special purpose acquisition companies (SPAC) to conduct merger transactions.","As of last month (30th October), HKEX has welcomed the first company to be listed through a De-SPAC transaction.

In September of this year, HKEX officially implemented arrangements for normal market opening in adverse weather conditions. "In the past, when Hong Kong hoisted the Typhoon Signal No. 8, the market had to close. Now, whether it's windy or rainy, the Hong Kong market will open as usual on trading days, and the Shanghai-Shenzhen-Hong Kong Stock Connect will also operate normally," said Bonnie Chan Yi-ting.

On 18th October this year, HKEX and the Securities and Futures Commission jointly announced further optimization of the timetable for the approval process of listing applications, making the listing approval process more clear and certain. Bonnie Chan Yi-ting stated that for companies already listed on the A-share market, if they meet certain conditions, they can enter a fast-track approval process when applying for listing on HKEX.

"Through this series of listing reforms, we have enhanced the efficiency of the Hong Kong market and its tolerance for xinjingji companies, aiming to better serve the real economy and provide more investment opportunities for investors," said Bonnie Chan Yi-ting.

Bonnie Chan Yi-ting mentioned that with the decline in interest rates and the introduction of a series of economic stimulus policies domestically, the Hong Kong market has shown many positive signals: the turnover of Hong Kong stocks, ETFs, and derivatives markets, as well as the turnover of the Shanghai-Shenzhen-Hong Kong Stock Connect, all hit new highs in October; the new stock market has also significantly warmed up, with several large new stocks being listed successively, and many international long-term funds participating in the subscription of these new stocks.

Editor/rice