HKEx CEO suggests need to ‘calm down’ before moving forward
Recent turmoil in Chinese stock markets may delay a plan to connect the stock exchanges of Hong Kong and Shenzhen until next year, according to media reports.
Sharp losses in Chinese stocks triggered by a devaluation in the local currency and fears of overvaluation after rapid gains mean connections between Hong Kong and Shenzhen, tentatively scheduled for completion toward the end of this year, may have to wait until 2016, the South China Morning Post reports.
‘Psychologically, this is not the time to talk t about mutual market access,’ said Charles Li Xiaojia, chief executive of Hong Kong Exchanges and Clearing (HKEx), at a conference in Singapore, according to the newspaper. ‘When you have just put out a fire, you don’t want to talk about buying a new sofa and doing nice window dressing. You want to calm down and figure out how to clean up ‒ and then move forward.’
In November last year authorities in Hong Kong and Shanghai created a trading link between their stock exchanges designed to allow increased foreign investment in Chinese stocks. Although the program did not draw the investment volume many analysts had predicted, authorities said they planned to create a similar link between Shenzhen and Shanghai. HKEx chairman Chow Chung-Kong said the link could launch by the end of this year.
But the plunge in Chinese stocks that started in mid-June has prompted a wave of action by Chinese officials, including a ban on stock sales by major shareholders, a crackdown on short-selling, massive stock purchases financed with government money and arrests of journalists and others on accusations of citing panic among stockholders.
