HONG KONG: At least 21 companies listed on the Hong Kong Exchanges & Clearing (HKEX) will start offering yuan-denominated trading this month, the exchange said on Monday, as the government seeks to bolster the city’s role as China’s offshore yuan hub.
It added securities may be added to the list before the launch date of the yuan counter, which is scheduled for June 19.
The first batch of companies accounts for 40% of the daily stock market turnover, Julia Leung Fung-yee, chief executive of the Securities and Futures Commission (SFC), told an industry forum.
In addition to single stocks, exchange-traded funds and real estate investment trusts are also eligible for the yuan counter, Leung said.
She also said she was working with the China Securities Regulatory Commission so that mainland traders would also be able to use the yuan counter, although she did not say when that could be possible.
“The development of the yuan-denominated products are essential to the internationalisation of the yuan, where Hong Kong plays a major role,” Leung said.
Many of the companies designated so far are constituents of the Hang Seng Index and they include social media company Tencent, e-commerce and internet groups JD.com, Meituan and Alibaba Group, search engine giant Baidu and smart phone maker Xiaomi.
Sports gear makers Li Ning and Anta sports Products are also on the list, as are the Hong Kong Exchanges & Clearing (HKEX), Sun Hung Kai Properties, and Hang Seng Bank. AIA Group is the only insurer included.
To encourage investors to take part in the yuan counter, the HKEX will set up a dual-currency market-maker programme so brokers can provide “two-way quotes” that smooth out the price differences between yuan and Hong Kong dollars and shelter them from exchange rate risk.
The HKEX said on Monday that nine exchange participants will act as market makers. They include BOCI Securities, CLSA, China International Capital Corp and Eclipse Options (HK).
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