HONG KONG May 22 A recently-announced scheme
that allows Hong Kong and mainland investors to buy stocks in
each other's market could extend to fixed income and currency in
the future, the chief executive of Hong Kong Stock Exchange said
Regulators in China and Hong Kong surprised market
participants last month by unveiling a cross-border stock
investment scheme, as part of steps to capitalise on the
internationalisation of the Chinese currency.
The pilot project, to be launched after a preparation period
of about six months, is the latest in a series of financial
sector reforms that regulators have taken this year, such as
widening the yuan's trading band and increasing quotas for
"Our overall strategy -- market mutual access -- applies to
everything... Over time we'll think whether or not Hong
Kong-Shanghai Stock Connect gives us any imagination to
potentially extend that into commodities and fixed income," said
Hong Kong Exchanges and Clearing chief Charles Li.
Li said there were three stages to develop the offshore yuan
market. The first stage of building up infrastructure has been
achieved in the past few years and market participants are now
focusing on the second stage, which is product innovation.
"Ultimately when these products are built... we are thinking
whether or not the significant need and the liquidity in China
and international markets can also converge," Li said.
The offshore yuan deposit pool globally has reached about
1.5 trillion yuan ($240.63 billion) and the $110 billion yuan
dim sum bond market has been vibrant so far this year despite
the currency's volatility.
However, that is still a small amount compared with the $4.8
trillion onshore bond market.
Li said in April that the Hong Kong Stock Connect scheme
could extend to commodity futures markets, but it would prove
more challenging because there were fewer products, and that
contracts were typically designed for risk management rather
than purely as investment tools.
($1 = 6.2337 Chinese Yuan)
(Reporting by Michelle Chen and Saikat Chatterjee; Editing by