UK-China EFD sees launch of London-Shanghai Stock Connect
UK listed companies will be able to sell shares in China from today (17 June), with the launch of the London-Shanghai Stock Connect. This is the first time that any foreign company will be able to list in mainland China.
Investors will be able to trade across London and Chinese time zones, allowing issuers from both markets to raise capital in the other market. It will mean UK listed companies can be traded by more investors, providing investors with greater choice.
There are almost 1500 companies listed in Shanghai, over 260 of which are potentially eligible to take part in Stock Connect and list in London. It is also estimated that China will reach over $17 trillion in assets under management (AUM) by 2030, having had $2.8 trillion AUM in 2016.
The launch of Stock Connect is the centrepiece of today’s UK-China Economic and Financial Dialogue (EFD) which sees the Chancellor host Vice Premier Hu Chunhua and a Chinese delegation in London to discuss multilateral and bilateral economic issues, financial services cooperation, and trade and investment.
Launching Stock Connect’s first day of trading at the London Stock Exchange, Philip Hammond, Chancellor of the Exchequer will say:
London is a global financial centre like no other, and today’s launch is a strong vote of confidence in the UK market.
Stock Connect is a ground-breaking initiative, which will deepen our global connectivity as we look outwards to new opportunities in Asia.
The culmination of four years’ work, Stock Connect will mean, for the first time, that international investors will be able to access China A-shares from outside of Greater China, and through international trading and settlement practices. Stock Connect will not require any direct trading infrastructure links. Instead, it will allow companies to dual-list on both the Shanghai and London Stock Exchanges using Depositary Receipts (DRs).
From today, London investors will have the opportunity to trade Global Depositary Receipts (GDRs) for Huatai, the technology-enabled securities group in China.
Depositary receipts (DRs) are certificates that represent an ownership of ordinary shares of a company, but that are marketed outside of the company’s home country. DRs are used primarily to increase a company’s visibility in the world market and to access a greater amount of investment capital in other countries. Depositary receipts are structured like typical stocks on the exchanges that they trade so that foreigners can buy into the company without worrying about differences in currency, accounting practices, or language barriers, or be concerned about the other risks in investing in foreign stock directly.
Latest News from
Scottish Income Tax shortfall offset by UK Funding19/07/2019 11:10:00
Scottish Government's £941 million income tax shortfall offset by £737 million increase in UK Government funding
The Infrastructure Finance Review: Expert Panel18/07/2019 17:02:00
The government has appointed a panel of advisors to support the Infrastructure Finance Review, which will conclude alongside the National Infrastructure Strategy in the Autumn.
Chancellor Philip Hammond calls out late payment culture18/07/2019 15:47:00
Radical cultural change is needed to end the scourge of late payments, which puts 50,000 small firms out of business every year, the Chancellor Philip Hammond said today (18 July).
Women in Finance Charter continues to drive change at highest level18/07/2019 14:43:00
The Women in Finance Charter now covers over 800,000 people in the financial Services sector. The 21 new signatories bring the total to over 350 signed up firms.
Finance sector backs British business women17/07/2019 11:10:00
Plans to increase the number of British female entrepreneurs have taken a leap forward, with major banks and venture capital firms signalling their support.
Criminals to face fresh crackdown in fight against dirty money12/07/2019 16:10:00
The Economic Crime Plan draws together actions to overhaul the approach to tackling economic crime, with greater partnering between the government, law enforcement and the private sector.
Finance Bill 2019-20: government publishes draft legislation11/07/2019 17:01:00
This legislation, which implements tax policies announced in recent fiscal events, continues the government’s commitment to a competitive and fair tax system.
UK companies to benefit from UK-Saudi trade09/07/2019 11:10:00
A summary of the outcomes from the first Economic and Social Pillar meeting of the UK-Saudi Arabia Strategic Partnership Council.