What’s new: Hong Kong will hold discussions with central government regulators on allowing Chinese mainland investors to trade Hong Kong stocks in the yuan through the stock connect program linking the two markets, according to a local official.
The move will strengthen Hong Kong’s role as an offshore yuan business hub, and improve the relevant ecosystem in the city, Christopher Hui, the city’s secretary for Financial Services and the Treasury, said in a legislative council meeting on Monday.
A task force had completed a feasibility study to use the yuan for the stock connect scheme, he said.
The background: Under the current stock connect program linking the stock markets in Hong Kong and the mainland, overseas investors trade mainland stocks only in the yuan, while mainland investors can trade Hong Kong stocks only in Hong Kong dollars.
Expanding the use of the yuan in the Asian financial hub’s stock market has been on Hong Kong’s agenda for years. In August, Joseph Yam, a former central banker of Hong Kong, said authorities can consider introducing the yuan for quotation, trading and clearing of stocks covered by the benchmark Hang Seng Index.
Hong Kong Chief Executive Carrie Lam said in October that the city was considering allowing Hong Kong stocks traded through the stock connect scheme to be denominated in the yuan.
Contact reporter Zhang Yukun (yukunzhang@caixin.com) and editor Bertrand Teo (bertrandteo@caixin.com)
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