HONG KONG regulators yesterday sought to clarify the status of a planned link between Hong Kong and Shenzhen stock markets, playing down an earlier report that stoked confusion over the program’s launch date and sent mainland stocks surging.

    Traders were confused after the People’s Bank of China website published comments from Zhou Xiaochuan, the central bank governor, that the trading link will be launched before year-end. Those comments, however, were made in May although traders viewed them as a renewed commitment to the connect program.

    Hong Kong Exchanges and Clearing Ltd. (HKEx) responded to the report, noting that the “proposed Shenzhen stock connect was still subject to regulatory approval and no agreement with counterparts has been entered into.”

    But the onshore rally continued even after the HKEx comments. Mainland investors often view the republication of official remarks as a political signal. In this case that the stock link would go ahead despite concerns that a market crash over the summer might put the program on hold indefinitely.

    Technical preparations have been completed for the connect, which is subject to approval from China’s regulators, Charles Li, chairman of HKEx, said in August.

    Late last year, Hong Kong and Shanghai launched a landmark trading program, which allowed foreign investors direct access to mainland listed stocks. But investor participation has been subdued due to regulatory uncertainty and risk of yuan depreciation.

    Still, many analysts expect the Shenzhen leg of the connect, which could offer foreign investors access to some of China’s hottest new economy stocks, to get a warmer welcome. (SD-Agencies)