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HKEx Looks To Inform Mainland Investors

by Mary Swire, Lowtax.net, Hong Kong
30 October, 2015

The Hong Kong Government is seeking to help Hong Kong-listed companies to improve documentation for prospective investors, to support the growth of the Shanghai-Hong Kong Stock Connect (SHKSC) program.

SHKSC was launched on November 17 last year. It opened up a new pool of investors for Hong Kong-listed companies in the Mainland. However, Chinese investors are said to have expressed concerns about a lack of understanding of how the market in Hong Kong operates and a lack of information on company developments and issues affecting companies.

The results of a survey jointly conducted by Hong Kong Exchanges and Clearing Limited (HKEx) and the Shanghai Stock Exchange (SSE) suggest that Mainland investors would like to know more about corporate actions in Hong Kong. The survey also found they are interested in more information on the background of Hong Kong-listed companies and updates from those firms.

"It has become more important for Hong Kong-listed companies to spare more effort on onshore investor relations work in the Mainland since SHKSC was launched," Mao Zhirong, Managing Director and Co-Head of HKEx's Mainland Division, said. "In this mutual market access era, more Hong Kong-listed companies see the need to engage with Mainland investors, but they face challenges due to the differences between the two markets; retail investors account for about 80 percent of the onshore market."

As part of HKEx's market outreach initiatives, it held a symposium with more than 200 representatives of Hong Kong-listed companies on October 27 to provide advice and best practices for investor relations work in Mainland China.

"We will continue to work with our listed companies to strengthen their understanding of the Mainland's investment ecosystem, and to help them share the benefits brought by the Stock Connect program," Mao added.

The SHKSC allows Mainland investors to trade stocks listed on the Stock Exchange of Hong Kong (SEHK) directly through the SSE – the Southbound Trading Link – for the first time. At the same time, it also allows Hong Kong and overseas investors to trade stocks listed on the SSE directly through the SEHK – Northbound Trading Link.

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