Hong Kong, China stock markets integration proposed by HK advisory group

Hong Kong, China stock markets integration proposed by HK advisory group

	Published : Mon, 15 Jan 2007 10:06 By : Agencies Print this Story

HONG KONG (XFN-ASIA) - The stock markets of Hong Kong and China should be integrated over time as part of a broader move that must be taken by the territory to build closer links with the mainland and benefit from its rapid economic development, a Hong Kong government financial services advisory group said.

The Financial Services Advisory Group is one of the four teams formed by Hong Kong to advise the government on how to benefit from China's11th Five-Year Plan -- which concerns the mainland's economic development in 2006-2010.

'The mainland stock and futures exchanges should take Hong Kong Exchanges and Clearing Ltd (HKEx) as (its) preferred partner for cooperation over exchanges elsewhere to pave the way for the integration of the two markets,' the group said in a report presented to the government today.

The HKEx operates Hong Kong's stock and derivative markets.

The group added that the government should encourage mainland corporations to make better use of Hong Kong's market and financial intermediaries for activities including fund raising, treasury, and international asset management.

The proposed measures are part of a package of recommendations that may be included in an 'action agenda' that will serve as a reference for economic strategy for the next five-year term of the Hong Kong government.

Moreover, the group said the local securities market should also extend its reach to potential quality issuers outside Hong Kong and China.

Noting that China is one of the world's largest consumers and suppliers of commodities, precious metals and other raw materials, the advisory group said Hong Kong also should consider developing a commodities futures market.

The financial services advisory group said that the government should, as a matter of strategy, ask the mainland government for help in further developing Hong Kong as 'China's international financial center of global significance.'

Such move should complement the development of other financial centers in the mainland, it said.

Hong Kong's top business leaders and academics drew up the recommendations following a government-sponsored Economic Summit last September.

The summit aimed to set up a platform for government, business and other sectors of the community to determine how Hong Kong should respond to the challenges and opportunities arising from China's 11th five-year plan.

jun.concepcion@xfn.com

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