“Groundbreaking” London-Shanghai Stock Connect

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Chancellor Philip Hammond announced the London-Shanghai stock connect this Monday.

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The treasury said that the UK-listed firms will be the first foreign companies to be able to get listed in the mainland China under a new stock link.

These firms will be able to sell their shares through the dual listings. Which means they will have their listings on both the Shanghai and London Stock Exchanges. Without a doubt this will allow many investors to get attracted and a good sign for the British firms getting listed.

That’s not all; this project will also allow companies to raise capital from each country in the other.  

“Stock Connect is a groundbreaking initiative, which will deepen our global connectivity as we look outwards to new opportunities in Asia,” Mr Hammond is expected to say at the launch, according to a statement from the Treasury.

“London is a global financial centre like no other, and today’s launch is a strong vote of confidence in the UK market.”

It took four years for the London-Shanghai Stock Connect project to get developed and started. Depository receipts will be used allowing each company to get listed on both the exchanges.

More than 260 of the 1,500 companies listed in Shanghai will be potentially eligible to take part of the project and list in London. Kicking off the initiative, London investors will be able to trade the global depositary receipts of China’s securities brokerage Huatai from Monday.

Giving consideration to the recent respective developmets (i-e) Brexit for the United Kingdom and Huawei for the Chinese, this indeed is a great development. Let us only wait and see what fruits the London-Shanghai Stock Connect will bring to the countries and business. Hoping for all the right and fruitful ventures ahead in coming years as both the countries are valuable in their own ways.

Source: BBC

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