China's State Council has approved the a stock connect program between Hong Kong and Shenzhen, Premier Li Keqiang said at a council meeting on Tuesday, without specifying any likely launch date or other details.
"The basic preparation work for the stock connect scheme between Hong Kong and Shenzhen is ready. The State Council has already approved the necessary documentation to introduce the Shenzhen–Hong Kong Stock Connect," Li said during the council meeting.
The statement marked the first time a senior Chinese official had confirmed the country’s second cross-border stock trading scheme, after a Shanghai-Hong Kong Stock Connect was launched nearly two years ago.
"China’s decision to launch Shenzhen-Hong Kong Stock Connect demonstrates the country’s continuing commitment to liberalizing its financial sector and opening up its capital markets to global investors," says Helen Wong, Greater China chief executive at HSBC.
"This link should provide investors around the world with a convenient way to access China's new generation of private sector companies listed in Shenzhen, including an array of innovative Internet and technology players based in the Pearl River Delta," she added.
Since the Shanghai-Hong Kong Stock Connect program was officially launched in November 2014, the market has been anticipating the revelation of a similar program to link the Shenzhen and Hong Kong markets.
The stock market crash last summer essentially put the work relating to the program on hold. In March this year, Premier Li Keqiang stated that a Shenzhen-Hong Kong Stock Connect shall be initiated "at an appropriate time".
"Opening up the financial market and capital market reform is an important part on China's reform agenda. It will help enhance China's financial market's global competitiveness and support the growth of the real economy," Li Keqiang said.