Hong Kong to Widen China’s Trading Link to Star Board, Biotech Stocks
(30 November 2020 – Hong Kong) Hong Kong will widen the scope of its trading link to Chinese bourses, giving both local and international investors access to a wider range of securities.
China-domiciled investors can invest in biotechnology companies listed on Hong Kong's stock exchange, while overseas investors will be allowed to tap into shares on Shanghai's technology-heavy Star Market via the expanded Stock Connect schemes, Hong Kong's Chief Executive Carrie Lam Cheng Yuet-ngor said in her annual policy address. Still, companies with secondary listings such as Alibaba Group Holding will remain excluded.
This initiative will give international investors access to the Star Market, which has grown into a 3.2 trillion-yuan (US$ 487 billion) bourse of 197 companies since its inauguration in July 2019.
The latest announcement, however, was a disappointment to investors betting on more inflow into shares of technology giants listed in Hong Kong. Firms such as Alibaba and JD.com have been excluded from the stock link.
"Biotech is a hot industry in Hong Kong and China, so any addition of these companies to the Stock Connect will encourage more mainland investors to trade in Hong Kong," said Institute of Securities Dealers chairman Tom Chan Pak-lam.
“The Central Government supports further deepening the mutual access between the Mainland and Hong Kong financial markets and the gradual expansion of the scope of eligible securities under the mutual market access programmes,” said Lam.