Shenzhen-Hong Kong link expected to start in November, CSRC says

[BEIJING] The long-awaited link between stock markets in Hong Kong and the mainland city of Shenzhen is expected to start in mid- to late-November, according to China's markets regulator.

Technical preparations for the link will take place from August to November, with the program scheduled to begin that month, according to a presentation slide at a China Securities Regulatory Commission press briefing in Beijing.

Hong Kong's exchange operator said when the program was approved on Aug 16 that preparations would take about four months. No official start date has previously been given.

The link, the second after Hong Kong-Shanghai, is another step in China's efforts to open its markets to the global financial community. Barriers to foreigners wanting to trade the US$6.4 trillion of mainland equities were one of the reasons that MSCI Inc decided not to include the shares in its global benchmark indexes in June. Authorities in Beijing have also kept tight control over how much money leaves the country.

Hong Kong Exchanges & Clearing Ltd said Tuesday it will be all set for a November start.

"The commencement of SZ Connect is subject to market readiness and regulators' approval," a spokeswoman for HKEX said by e-mail. "We expect the Hong Kong market should be ready in the second half of November based on our latest assessment."

The CSRC will release more details on the link later today. Delays to the tentative schedule are possible, with officials in Hong Kong having previously indicated start dates that subsequently fell by the wayside.

The daily limits for the Shenzhen link will be the same as for Shanghai's, 13 billion yuan (S$2.6 billion) for orders going north to the mainland and 10.5 billion yuan for southbound traffic.

The connect will also include small-cap companies listed in Hong Kong that have a market value of more than HK$5 billion (S$875 million).

BLOOMBERG