London-HK Connect to create more intermediary opportunities

November 05, 2015 11:39
The Hong Kong market is mature enough to help the mainland China market become more market-oriented and internationalized, says Yue Yi.  Photo: HKEJ

London-Hong Kong Connect, the proposed link between the two financial centers' commodities markets, will provide Hong Kong with more intermediary opportunities, a senior banker in the city said.

Yue Yi (岳毅), chief executive and vice chairman of BOC Hong Kong (Holdings) Ltd. (02388.HK), said the business opportunities that the link will bring about could turn Hong Kong into a commodity trading center.

The city can continue to be a super-coordinator under the new initiative, building on the foundation laid down by Shanghai-Hong Kong Stock Connect, he was quoted as saying in a report by the Hong Kong Economic Journal Thursday.

That model can further be replicated in Shenzhen-Hong Kong Stock Connect, and a link between bond markets, among others, Yue said.

Hong Kong Exchanges and Clearing Ltd.'s (HKEx, 00388.HK) futures arm inked a memorandum of understanding with London Metal Exchange, a subsidiary of HKEx, last month during President Xi Jinping's state visit to Britain.

The MOU enables the two sides to set up a direct link to sell LME-listed products to qualified market players in Hong Kong, with settlement to be done through HKFE Clearing Corp. Ltd., another HKEx subsidiary.

Yue said the Hong Kong market is mature enough to help the mainland China market become more market-oriented and internationalized, and more pilot schemes will be tried out in the city.

[Chinese version中文版]

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Hong Kong Economic Journal