China premier says cabinet approves launch of Shenzhen-Hong Kong Stock Connect

Chinese Premier Li Keqiang speaks at the 11th EU-China Business Summit at the Great Hall of the People in Beijing on Wednesday, July 13, 2016.
Chinese Premier Li Keqiang speaks at the 11th EU-China Business Summit at the Great Hall of the People in Beijing on Wednesday, July 13, 2016. PHOTO: REUTERS

SHANGHAI (REUTERS, BLOOMBERG) - China's premier Li Keqiang said the State Council had approved the launch of the Shenzhen-Hong Kong Stock Connect programme linking the two exchanges, without giving further details on the launch date.

Mr Li, in comments posted on a government website, said that preparatory work for the long-awaited programme had been basically completed. "The move marks a solid step toward better legal structure and international market orientation of China's capital markets," Mr Li was quoted as saying.

The China Securities Regulatory Commission (CSRC) said earlier in August that it would launch the scheme sometime this year.

The announcement on the State Council's website comes about two months after MSCI Inc. cited accessibility issues in deciding not to include Chinese-listed shares in its global benchmark indexes, a blow to government efforts to raise the profile of the country's markets and increase the international importance of the yuan.

The statement didn't give any indication on when the connect would start.

Investors had expected the gateway to Shenzhen to open last year, but officials held off as they grappled with fallout from the summer's US$5 trillion (S$6.7 trillion) equity rout and January's botched introduction of circuit breakers. The Shenzhen Composite Index is down 12 per cent in 2016.