The development of Connect schemes between Hong Kong and the mainland will move from a focus on connectivity to utilisation over the next three to five years, aiming to help long-term investors allocate assets and keep funds in the Chinese market, according to Hong Kong Exchanges and Clearing (0388) head of markets Gregory Yu Hock-ken.
Hong Kong's initial public offering market has attracted European and American long-term funds, sovereign wealth funds of the Middle East, and diverse investment from Asia Pacific regions, while southbound funds also enter the city for opportunities, Yu said.
As Chinese mainland insurance funds are allowed to invest in Hong Kong exchange traded funds through Southbound Stock Connect, the move will enhance the engagement between the mainland and overseas markets, Yu added.
Meanwhile, Zhang Bin, Director of the department of international affairs at the Shanghai Stock Exchange, pointed out that the bourse will further encourage long-term capital to enter the market, as well as enhancing the engagement with overseas sovereign wealth funds.
The authority will continue to improve the quality of listed companies in the A-share market and identify more listed firms for inclusion in the Stock Connect, he said, adding that boosting dividend payouts and share buybacks, as well as enhancing ESG disclosure, will be further advanced.
Wang Shenghui, director of the Membership Supervision Department at the Shenzhen Stock Exchange, noted that the exchange will push ahead with preparations for including Real Estate Investment Trusts and yuan stock trading counters in the Connect schemes, supporting closer cooperation between index companies and market institutions on both sides, as well as enriching the range of cross-border investment products.
