[HONG KONG] Hong Kong's stock exchange held initial talks with Taiwan about a possible stock market link, its chairman said on Wednesday, a scheme that would potentially allow investors in both markets to directly cross-trade shares for the first time.
Hong Kong Exchanges & Clearing Ltd (HKEx) Chairman Chow Chung Kong declined to give further details on the proposed link, which could be similar to a scheme launched late last year with the Shanghai stock exchange.
Any potential tie-up with the Taiwan exchange could give Hong Kong investors direct access to a market with a US$912 billion capitalisation. Hong Kong investors must currently invest in Taiwan stocks via brokers. Taiwan investors could also access the Hong Kong bourse, which has a market value of about US$4 trillion. "We have had preliminary discussions," Mr Chow told HKEx's annual general meeting in Hong Kong, referring to the possible connection with Taiwan.
In a later statement, HKEx said that it would need to consult the authorities in Taipei before anything beyond very preliminary discussions could take place.
The Taiwan Stock Exchange (TWSE) has been eager to broaden its trading links to bolster its position after the launch of the Hong Kong-Shanghai connect, and has said it will link with Singapore by the end of the year.
The stock connect scheme HKEx launched with Shanghai last November allows investors in mainland China to buy Hong Kong-listed shares, and vice versa, directly via each other's exchanges.
HKEx's comments follow a visit by executives to Taipei last week, according to a person with knowledge of the talks. But any link could be a long way off, with HKEx Chief Executive Charles Li describing it only as a 'future possibility' at the meeting.
HKEx is still waiting for regulatory approval to launch a link to the Shenzhen stock exchange, Mr Li told reporters.