HKD-RMB dual counter launched at HKEX

The HKD-RMB Dual Counter Model was launched on Monday at the Hong Kong Exchanges and Clearing (HKEX) to further support the RMB development in the Hong Kong securities market.

The HKEX introduced the HKD-RMB Dual Counter Model to the secondary market for trading and settlement purposes. That would allows investors in Hong Kong to trade stocks concurrently in both Hong Kong dollar and the yuan.

A total of 24 companies will start offering yuan counters at the scheme's launch.

The HKEX has said all shares of the same securities in the two trading counters will be fully interchangeable between counters. They will be designated as the HKD-RMB Dual Counter Securities.

The exchange will initially target the offerings at investors holding offshore yuan.

Financial Secretary Paul Chan Mo-po inaugurated the counter with the customary sounding of the gong along with HKEX chairwoman Laura May-Lung Cha. 

The HKEX is also rolling out a market-maker program, so that any price differences between the two counters because of the yuan's moves can be reduced.

The first batch of investors could be holders of offshore yuan deposits in Hong Kong, which totalled 833 billion yuan ($117 billion) at the end of April, as they look for potentially higher returns in the stock market.

Yuan holders in China's trading partner countries, such as Russia, Pakistan and the Middle East, could also be potential investors.

The HKEX is working with mainland regulators to allow mainland investors to eventually participate via the Stock Connect investment channel that connects the Hong Kong, Shanghai, and Shenzhen stock exchanges.

(Staff reporter, China Daily and Reuters)