Just over three years old, the Stock Connect scheme linking the markets of Hong Kong and China has already emerged as one of the core pillars of international investors’ strategies to access Chinese equities—and with increasing global interest and participation—looks set to grow.
At the same time, the pace of change observed in China as well as the broader global investment landscape mean Stock Connect will, to some extent, always be evolving. The question is how the evolution will benefit investors and China’s equity markets as a whole. This paper, based on the views of subject matter experts from BNY Mellon and regulators and in-depth research, will explore the current realities and future potential of Stock Connect, and examine how it has developed thus far, and course it will chart in the near-term. The paper also looks at advantages and drawbacks versus other market access schemes, the challenges Stock Connect scheme faces and how these are being addressed, as well as its possible extension to other asset classes and connection with other jurisdictions.
“2018 will be Stock Connect’s ‘road to Damascus’ moment – MSCI inclusion will provide the much needed fillip as interest in the scheme will continue to grow and develop into the future.”Mathew Kathayanat, APAC Head of Product and Strategy, Asset Servicing, BNY Mellon
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