New Market Access Measures to Boost Financial Connectivity in Hong Kong and China
Hong Kong welcomes new market access measures introduced by the China Securities Regulatory Commission (CSRC). These measures will strengthen the connection between the city and Mainland China.
The measures will include supporting Mainland companies, helping them get listed in Hong Kong, and expanding real estate investment trusts (REITs) and equity exchange-traded funds (ETFs). In doing so, Hong Kong’s financial market will be boosted, and more investment opportunities will become available for local and international investors. This will solidify Hong Kong’s role as an offshore RMB hub.
How Will the New Market Access Measures Help Businesses?
Here’s how this move is set to help businesses:
Diversification of Investment Products
Including new asset types like real estate investment trusts (REITs) and the expansion of equity exchange-traded funds (ETFs) under Stock Connect will offer investors a broader range of investment options. This diversification can attract both domestic and international investors seeking varied portfolios.
Enhanced Liquidity and Capital Inflow
By encouraging top mainland industries enterprises to list in Hong Kong, there will likely be an increase in IPO activities and secondary market trading. This inflow of companies and capital enhances the liquidity of Hong Kong’s financial markets and provides more opportunities for investment and growth.
Development of the RMB as an International Currency
Including the renminbi (RMB) stock trading counter under the Southbound trading of Stock Connect and providing more investment options for offshore RMB helps promote RMB internationalisation. This not only solidifies Hong Kong’s role as a critical offshore RMB centre but also supports the global use of the currency.
Strengthening Hong Kong’s Financial Market
These initiatives further cement Hong Kong’s position as a major international financial hub. Enhancing the competitiveness and attractiveness of Hong Kong’s financial markets helps maintain its status as a critical gateway between the Mainland and global capital markets.
Economic Stability and Growth
The expansion of mutual market access and supportive measures like stamp duty waivers on REITs, funding for investment trusts, and improved regulatory regimes can stimulate the financial sector. This, in turn, contributes to the overall economic stability and growth of Hong Kong.
Support and Confidence
The backing from the Mainland China government, as highlighted in the announcements, provides a significant confidence boost to the market. It reassures investors and businesses of the strong support and commitment to Hong Kong’s financial market development.
Overall, these measures will make Hong Kong’s financial markets more dynamic and attractive to a broader range of investors. Thus, they’ll drive further economic development and enhance the city’s role as a bridge between China and the international financial community.
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