Shanghai bourse green lights HSBC as cross-border conversion institution

Date: 09 Jul 2019

HSBC Bank plc has been approved by the Shanghai Stock Exchange to become a global depositary receipt UK cross-border conversion institution under the Shanghai-London Stock Connect mechanism on Friday.

The number of cross-border conversion institutions increased to seven with others being China International Capital Corporation (UK) Limited, ICBC Standard Bank Plc, JP Morgan Securities plc, CLSA (UK), Haitong International (UK) Limited, and Barclays Bank PLC.

The rise in cross-border conversion institutions' number reflects the connectivity mechanism is accelerating, which will be conductive to attract more outstanding Chinese and UK companies to enter each other's markets, and provide diversified investment options to investors, said the Securities Daily, citing Zhang Jun, chief economist of Morgan Stanley Huaxin Securities.

In an important step to internationalize A-share market, the Shanghai-London Stock Connect was launched, according to the Securities Daily, citing Yang Delong, chief economist at the Shenzhen-based First Seafront Fund.

The connectivity mechanism is conductive to attract foreign investment and also provide convenience to investors in the two countries, Yang said.

As the A-share market opening-up process speeds up, more foreign capital has been attracted to inflow that will reshape stock valuation system in A-share market, said Song Yun, senior researcher at Rushi Advanced institute of Finance, told to the Securities Daily.

Foreign investors prefer to invest in consumption, finance and the mainstream industries, as well as in medium- or large-sized market value, high profits, high dividend and low fluctuation, Song said.

The connectivity mechanism commenced trading on June 17, allowing the London Stock Exchange-listed companies list the Chinese depositary receipts on the Shanghai Stock Exchange, or the A-share companies on the Shanghai Stock Exchange list the global depositary receipts on the London Stock Exchange.

Source: China Daily

Subscribe to CGA Newsletters