Hong Kong Exchange CEO Li says link to China will be expanded

HONG KONG (Bloomberg) - Hong Kong Exchanges & Clearing Ltd., the world's biggest bourse operator by value, expects the trading limits for the equity link to China will be expanded.

The city's bourse had record trading turnover for two days this week as Chinese investors used up their daily quota for buying Hong Kong stocks. Regulators in Hong Kong and China would need to agree on the quotas expansion with the authorities developing plans for one more trading connection with the Shenzhen exchange, said Romnesh Lamba, HKEx's co-head of global markets.

"There will definitely be an expansion," HKEx's Chief Executive Officer Charles Li said Friday in Hong Kong in Mandarin. "The expansion won't simply be 20 per cent to 30 per cent. If there's an expansion, it must be of a certain magnitude."

The Hong Kong exchange is developing new products, which can be included in the link between the former British colony and China, Li said. HKEx last October started an equity link with the Shanghai exchange, also known as Shanghai-Hong Kong Stock Connect, with a 550 billion yuan (S$120.40 billion) overall limit on the value of equities investors can hold.

"The whole aim of having a quota is to ensure stability for when the link started, and we've basically now reached stability," Li said. "Everybody should have a little patience."