Hong Kong-Shenzhen connect launch date announcement delayed: sources

[HONG KONG] The announcement of the launch date of the landmark Hong Kong-Shenzhen stock market link is on hold due to technical issues, putting at risk China's pledge to have the scheme ready by year-end, three sources familiar with the situation said.

Global funds and other industry participants had been expecting regulators to announce in May a launch date for the Shenzhen trading link, which will complement an existing scheme connecting Hong Kong with Shanghai.

A delay beyond August risks pushing the Shenzhen project into 2016 and would cause a setback to Chinese regulators who have been gunning for a 2015 start.

It would also potentially delay the inclusion of China's"A-shares" into global benchmark indices such as the MSCI Emerging Markets Index, as one of the key criteria for inclusion is greater access to China's stock markets.

China's currency regulator, the State Administration of Foreign Exchange (SAFE) and its stock market watchdog, the China Securities Regulatory Commission (CSRC), are yet to agree on how many securities will be tradable via the link-up and how to allocate existing cross-border investment quotas once the scheme is in place, the sources said.

The sources, who have been in discussions with the regulators, declined to be identified as they are not authorised to speak to media.

The Chinese regulators and the Hong Kong Stock Exchange declined to immediately comment when contacted by Reuters.

Beijing has said the Hong Kong Shenzhen stock connect scheme would be launched in the second half of the year.

The Hong Kong-Shanghai stock connect scheme was announced in April 2014 and launched in November of that year.

REUTERS