INSUBCONTINENT EXCLUSIVE:
By Benjamin Robertson and Viren Vaghela
The long-awaited link between stock exchanges in London and Shanghai is close to becoming a
financial system.
The London-Shanghai Stock Connect will start later this year, allowing companies from China to sell global depository
receipts in the UK and enabling London-traded firms to list similar securities in Shanghai, according to the LSE presentation seen by
The securities issued by Chinese companies will appear on what LSE calls the Shanghai Board
broader financial opening, which began in earnest with a stock connect to Hong Kong in 2014
The UK tie-up will provide another avenue for foreign investors to buy Chinese shares and, unlike the Hong Kong connect, allow international
Karine Hirn, partner at East Capital Asset Management in Hong Kong
dollars, with the possibility of yuan and pounds
UK time Chinese companies wishing to list in London will need to already be on the Shanghai Stock Exchange, worth at least 20 billion yuan
in the presentation.
An agreement for some sort of exchange connection between London and Shanghai has been in the works since at least
September 2015, when plans were disclosed during a visit to China by then-UK Chancellor of the Exchequer George Osborne
Gang said in April that authorities were hoping to start the program this year.
Chinese bourses have been forging closer relationships with
aims to tie economies across Asia and Europe more closely to China.
While the two stock-trading links -- Shanghai and Shenzhen -- with Hong
Kong have garnered the most attention, Chinese institutions have also taken stakes in markets in Bangladesh and Pakistan, and formed a joint
venture with Deutsche Boerse AG in Frankfurt.
