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Published: 17:38, June 07, 2023 | Updated: 17:42, June 07, 2023
'HKD-RMB counter model boon for RMB internationalization'
By Liu Yifan
Published:17:38, June 07, 2023 Updated:17:42, June 07, 2023 By Liu Yifan

This file photo dated July 4, 2018 shows the bronze bull sculptures outside the Hong Kong Stock Exchange building in Central, Hong Kong. (CALVIN NG / CHINA DAILY)

The June 19 launch of the renminbi-Hong Kong dollar dual-counter model for stock trading will further promote internationalization of the RMB by enriching investors’ choices for RMB products in the city, Hong Kong Exchanges and Clearing said at a media workshop on Wednesday.

Wilfred Yiu, co-chief operating officer and head of equities at HKEX, said the next step for the bourse operator is to work with Chinese mainland authorities to expand the dual-currency counters’ capacity. However, no timetable can be disclosed for this yet as the mode of operation and technical details remain under discussion, he added.

Hong Kong has long been considered the global center for RMB trade settlement, financing and asset management, where a wide range of RMB products and services are available to meet the needs of businesses, financial institutions, and investors.

HKEX has so far approved the first batch of shares of 21 listed companies to be included in the dual counter model. These include Chinese e-commerce giant Alibaba Group, artificial intelligence company SenseTime and Hong Kong developer Sun Hung Kai Properties, accounting for around 40 percent of daily stock market turnover

Since 2010, 140 RMB-denominated products such as RMB-denominated bonds, exchange-traded funds and futures have been launched in Hong Kong, Yiu said.

ALSO READ: HKMA welcomes launch of HKD-RMB dual counter model

The bourse operator has so far approved the first batch of shares of 21 listed companies to be included in the dual counter model. These include Chinese e-commerce giant Alibaba Group, artificial intelligence company SenseTime and Hong Kong developer Sun Hung Kai Properties, accounting for around 40 percent of daily stock market turnover.

Yiu said some companies’ applications for the dual-currency counters remain under review and it is possible that more shares will be added to the list before the official launch.

Nine financial firms will act as market makers to provide trading liquidity to reduce the price difference between the Hong Kong dollar and RMB counters, according to a statement announced by HKEX on Monday.

These market makers, including BOCI Securities and Jane Street Asia-Pacific, will conduct cross-counter arbitrage trading to ensure the prices of the two counters tend to be the same after excluding the exchange rate factor, Yiu said.

When speaking of brokers’ participation, Yiu said HKEX had offshore RMB products as early as 2010, and it was believed that most brokers had trading systems for RMB-denominated products, but they were still unsure about the dual-counter model. 

READ MORE: HKEX to launch HKD-RMB dual counter model next month

He said he respected the choice of brokers but also hoped that the industry can seize the development opportunity of dual counters and participate in the internationalization of the RMB.

evanliu@chinadailyhk.com

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