UPDATE 1-HKEx in cooperation talks with mainland China stock exchanges

Wed Apr 2, 2014 8:35am EDT

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(Recasts, updates with HKEx statement)

HONG KONG, April 2 (Reuters) - Hong Kong Exchanges and Clearing Ltd said it is in talks on cooperation with mainland China stock exchanges, a deal that could allow investors to buy mainland-listed stocks via the Hong Kong exchange.

The Hong Kong exchange operator said there was no guarantee such a deal could be reached.

HKEx shares had jumped nearly 6 percent on Wednesday, their biggest gain in over a year, on a report on the cooperation talks in the 21st Century Business Herald.

The paper said the Hong Kong and Shanghai exchanges were close to an agreement on integrating their networks, allowing the Shanghai bourse to collect buy and sell orders in China, with the Hong Kong bourse executing the orders and vice versa.

HKEx's shares stock hit their highest level since Jan. 23 this year before trading in them was halted. The benchmark Hang Seng Index rose 0.3 percent.

HKEx said it had requested that the city's regulator allow resumption of trading on Thursday morning.

In January last year, the People's Bank of China said it was preparing a trial that will allow individuals in China to invest in overseas markets. The programme would be an extension of the existing Qualified Domestic Institutional Investor scheme that permits some institutions to invest in global markets.

Hong Kong's stock exchange is hoping that a slate of new initiatives will give it a much-needed boost after it reported lower-than-expected annual earnings in February.

Hong Kong and China are putting the finishing touches to a landmark deal that would encourage money managers to base operations in the former British colony to target the huge onshore market, a top regulator said on Tuesday. (Reporting by Donny Kwok and Lawrence White; Editing by Chris Gallagher and Jane Merriman)

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