Date
16 January 2017
A stock market link between Hong Kong and Shenzhen would expand a similar program with Shanghai that started last November. Photo: Bloomberg
A stock market link between Hong Kong and Shenzhen would expand a similar program with Shanghai that started last November. Photo: Bloomberg

PBOC chief’s dated comments spark rally in HK, mainland stocks

China’s central bank unintentionally sparked a surge in the Hong Kong and mainland stock markets by publishing five-month-old comments from governor Zhou Xiaochuan that said a link between exchanges in Shenzhen and Hong Kong would kick off this year.

Zhou’s comments appeared in a lengthy article dated Tuesday that focused on the need for Communist Party discipline. It was published on the website of the People’s Bank of China without any indication that the statements were old, Bloomberg reported.

The central bank later said via text message that the comments were taken from a speech on May 27, while Hong Kong’s bourse said the stock link program is still subject to regulatory approval.

The clarifications came after a 3.3 percent surge in the Shenzhen Composite Index and a 3.1 percent gain in Hong Kong’s Hang Seng Index.

The PBoC article moved markets because it came as a surprise to many investors who had anticipated the link would be delayed after a US$5 trillion rout in Chinese shares.

“It seems there is no unified channel to talk about this, and every time an individual authority talks about it the market has the chance to drum up or down,” said Castor Pang, head of research at Core-Pacific Yamaichi Hong Kong.

Authorities have given few details about the timing of the program since China’s stock-market selloff started in June.

The link may begin in the second half of the year, Hong Kong Chief Executive Leung Chun-ying said May 28.

The city’s exchange operator had also outlined a similar timeframe, and a person familiar with the matter said in May that China’s State Council had signed off on the plan.

A stock market link between Hong Kong and Shenzhen would expand a similar program with Shanghai that started last November.

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