A TRADE link between the Shenzhen and Hong Kong stock exchanges might be launched in the second half of this year, following the Shanghai-Hong Kong Stock Connect, which started in November, according to the head of the Hong Kong bourse Tuesday.

    The connection with Shenzhen may offer investors more choices, said Charles Li, CEO of the Hong Kong Stock Exchange (HKEx).

    Shenzhen Mayor Xu Qin said the stock exchanges in both cities have made preparations to support the program and are awaiting approval from the Central Government.

    “Over the past decades, Shenzhen has deepened its cooperation with Hong Kong in multiple fields including economy, environmental protection, culture, education, health and sanitation, and I believe the technical work (required to set up the link) can be completed soon,” said Xu at the annual session of the Guangdong Provincial Committee of Chinese People’s Political Consultative Conference on Tuesday.

    Song Liping, President and CEO of Shenzhen Stock Exchange, confirmed that Shenzhen is preparing for the program.

    “The mutual market access program can be expanded to allow for cross-border trading of equity derivatives, commodities and fixed-income assets,” Song said.

    He noted that the Shenzhen-Hong Kong stock link will boost the possibility for A shares to be included into MSCI Inc.’s widely traded emerging market index.

    However, trading under the current link has been tepid, as investors used up only about 20 percent of the 235 billion yuan (US$38 billion) quota that is available daily.

    Li said securities regulators on both sides are planning to ease curbs on the link and to increase the number of trading days to boost vitality.

    He also remarked that he thinks Hong Kong should enhance its competitiveness and reposition its financial markets as the Chinese mainland gradually opens its capital markets.

    There are new and diverse opportunities emerging for Hong Kong and HKEx as the mainland expands its scope for domestic investors to invest in international markets, he said, adding that these emerging opportunities come with significant risks for Hong Kong and its traditional roles. He said they also require new capabilities, innovative solutions and, above all, prompt action.

    (Luo Songsong)