The London Stock Exchange is considering forging a link with the Shanghai bourse like that between Hong Kong and the Chinese financial hub, state media reported yesterday.
“We are working on it and trying to understand what might be involved,” London Stock Exchange Group (LSE) equity and derivative markets head Nicolas Bertrand said in Beijing, according to the China Daily.
The newspaper said the program would be similar to the stock connect between the Shanghai and Hong Kong bourses.
That scheme, which was launched in November last year, enables international investors to trade selected stocks on Shanghai’s tightly restricted exchange while also allowing Chinese investors to buy shares in the former British colony.
The tie-up was set up as part of China’s move to open up its financial markets, and officials said in March it would also link trading between the Shenzhen and Hong Kong stock markets, although the launch is still pending.
Bertrand did not offer a timetable for the inauguration of such a scheme between London and Shanghai, the report said.
It added that he said such a tie-up would add more complexity to the British bourse’s operations, adding it was in talks with regulators, clients and assets firms to ensure any connection could meet relevant regulatory requirements and conditions.
London is the largest Chinese yuan market outside China and Hong Kong, and the LSE is aiming to launch more trading products denominated in the currency, the China Daily said.
There are currently 61 Chinese companies listed in Europe’s biggest financial center, and LSE officials said they are working to attract more firms from China to list, the report said.
LSE primary markets and emerging markets deputy head Jon Edwards said it saw opportunities for Chinese companies floating overseas assets in London.
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