Date
19 September 2017
Securities firms will need to invest in IT to ensure compatibility between the trading systems in Hong Kong and Shanghai. Photo: Reuters
Securities firms will need to invest in IT to ensure compatibility between the trading systems in Hong Kong and Shanghai. Photo: Reuters

Extra IT costs emerge in cross-border stock linkage

Securities firms will be responsible for their information technology (IT) needs in order to participate in the Hong Kong-Shanghai cross-border equities trading scheme, Hang Seng Bank Ltd. (00011.HK) said Wednesday.  

By investing in technology, these companies can address disparities between the trading systems of Hong Kong and Shanghai, Hang Seng executive director Andrew Fung told a press briefing.

Hang Seng will test its trading system in June and July and may need to hire additional A-share investment consultants and IT staff, Fung said. 

The linkage, dubbed Hong Kong-Shanghai Stock Connect, is expected to help improve corporate governance and transparency in mainland firms, including state-owned enterprises, while speeding up opening of China’s capital account.

A similar cross-border scheme for the futures market is seen as the next step, Fung said. 

Yuan Ji, deputy general manager of Guangzheng Hang Seng Research Co. Ltd., expects cross-border share trading to boost China’s A-share market, especially financial stocks, which account for about 30 percent of the Shanghai market.

Shanghai-listed banks and insurers will benefit due to their discount to Hong Kong-traded H shares. 

Meanwhile, Hong Kong-listed Chinese telecom and technology firms and gaming companies will gain support from mainland investors, he said.

– Contact the reporter at [email protected]

AM/JP/RA 

Ayishah Ma is a financial reporter on Greater China issues.

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