(Original title: Renminbi can directly buy Hong Kong stocks)
The purchase of Hong Kong stocks by RMB is coming soon. A few days ago, the Hong Kong Stock Exchange announced that it will launch the “Hong Kong dollar-RMB dual-counter model” and the dual-counter market maker mechanism in the Hong Kong stock market on June 19. Currently, 24 Hong Kong stocks have been shortlisted. The industry believes that this move will help consolidate Hong Kong’s position as the world‘s largest offshore RMB center and is also an important step in promoting the internationalization of the RMB.
The so-called “dual-counter model” is the general term for the entire HKD-RMB dual-counter transaction process, banker activities and settlement models. Under the dual-counter mode, investors can trade in Hong Kong dollars and RMB respectively. The securities under the two counters belong to the same category of securities, so the securities of the two counters can be converted into each other without changing the beneficial ownership, and there is a dual-counter market maker mechanism to solve the problems of liquidity and price difference between the two counters.
It is reported that the dual-counter model for Hong Kong stocks will be implemented in stages. Initially, market participants in the Hong Kong stock market can start using the dual-counter for transactions. However, mainland investors cannot immediately participate in the dual-counter model through Hong Kong Stock Connect. In the initial stage, they may mainly focus on local or overseas investment in Hong Kong or try to use.
On the 11th, Hong Kong Financial Secretary Chen Maobo published a blog saying that the upcoming dual-counter model transaction will promote more efficient flow of offshore RMB in the international market. In the future, the number of shares that can be traded under the dual-counter model will increase in stages. In order to effectively reduce the price difference between the Hong Kong dollar and RMB counters and at the same time increase the liquidity of the RMB counters, the new arrangement will include the establishment of a “dual counter market maker mechanism”.
Chen Maobo revealed that at present, nine exchange participants have been granted dual-counter market maker licenses, and the next step will be to promote the inclusion of RMB-denominated securities in the “Southbound Connect”, so that mainland investors can directly use onshore RMB funds to buy and sell Hong Kong stocks. Exchange risks that may be faced when funds go south.
Judging from the list of the first batch of dual-counter securities, the first batch of 24 selected stocks belong to industries including technology network, finance, real estate, and consumption, accounting for about 40% of the average daily trading volume of Hong Kong stocks. Among them, CNOOC, China Mobile, BYD, Great Wall Motors, and Ping An of China have all been listed in the Mainland and Hong Kong, and are all AH share companies; in addition, Tencent Holdings, Kuaishou, Xiaomi Group, Alibaba, JD.com, etc. Internet stocks.
Regarding the dual-counter model, Liu Gang, a strategic analyst at CICC, said that in the short term, the introduction of the dual-counter model will directly reduce the foreign exchange exposure of mainland investors investing in Hong Kong stocks and the resulting fluctuations in net worth. In the medium term, the dual-counter model will help improve the liquidity and transaction activity of Hong Kong stocks. In the long-term dimension, the dual-counter model also has long-term significance for promoting the development of RMB internationalization.
Chen Fu, chief analyst of non-bank finance at GF Securities, pointed out that in the short term, the impact on trading volume will be small. At present, the dual counters are only applicable to local transactions in Hong Kong, and the RMB counter is applicable to Hong Kong funds holding RMB, and Hong Kong Stock Connect is not yet applicable. In the long run, if the dual-counter mechanism is included in Hong Kong Stock Connect, it is expected to stimulate the vitality of southbound capital trading.
Zhongtai International believes that most of the companies that are the first to apply for this model are blue-chip stocks, and their popularity, market value, and market attention are very high, and they have a certain exemplary role. In the past three months, these companies have seen active transactions and a high degree of capital participation in Hong Kong Stock Connect. After the introduction of RMB pricing, the transaction volume will be larger, and the pricing role of RMB on these assets can be enhanced.
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