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HK to benefit from pilot investment scheme

(Xinhua)
Updated: 2007-08-21 15:36

HONG KONG-- The pilot scheme announced by China's State Administration of Foreign Exchange (SAFE) for mainland individuals to invest directly in securities in Hong Kong has met with warm welcome in Hong Kong.

The pilot scheme was in line with the mainland's policy objective of allowing orderly outflows of funds, said John Tsang, financial secretary of the Hong Kong Special Administrative Region government.

"The use of Hong Kong's financial platform for mainland individuals to invest in securities offshore is a clear demonstration of the mutually-assisting, complementary and interactive relationship between the financial systems of the mainland and Hong Kong," he said, noting such move will help enhance the status of Hong Kong as an international financial center.

Under the scheme, resident individuals in the Binhai New Area of northern China's port city of Tianjin can use foreign currency funds of their own or those converted from renminbi to invest in securities listed on the Hong Kong Stock Exchange.

SAFE officials said that the scheme will be expanded to other cities if it works well in Tianjin.    

Buoyed by the news and a strong rebound in neighboring markets, Hong Kong stocks surged more than 1200 points, or 5.93 percent, Monday, representing the biggest single-day rise since October 1998.

Also welcoming the news, Chief Executive of the Hong Kong Monetary Authority Joseph Yam said the pilot scheme was conducive to the interaction and the mutual development of the financial markets in Hong Kong and the mainland.

He said that the authority will work with mainland's relative departments to strengthen the links and interaction of the financial markets of the two places, increasing their overall size and efficiency.

In a statement, Hong Kong Exchanges and Clearing Limited (HKEx) said Hong Kong is an open and free market where securities trading is fair and orderly, adding it welcomes investors from all over the world as long as they comply with the rules of their place of residence for overseas trading before investing in Hong Kong.

HKEx said the quality investment instruments in its market are attractive to mainland investors, whose investments in the Hong Kong market will help narrow the price gap between Hong Kong-listed H shares and the mainland-listed A shares, and will help foster the healthy development of both markets.



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