By Zi Ben (China Daily)
Updated: 2007-08-30 09:53

Mainland investors have shown strong interest in buying Hong Kong stocks after individuals got approval to directly invest in the market last Monday.

Over a thousand mainland investors have registered with four wealth management centers at Bank of China's (BOC) Tianjin branch to enable them to buy Hong Kong stocks, according to a client service hotline at the branch.

"And thousands of individuals have made phone enquiries about the process and how to apply," the hotline said.

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Investors will be able to buy Hong Kong stocks directly five days after they open an account with BOC. They will be charged fees for buying and selling Hong Kong stocks at 0.718 percent of the transaction volume - lower than the rate for buying and selling A shares, according to the hotline.

The bank is yet to receive approval from the regulator to get the ball rolling. But as the initial gateway for the pilot scheme, the bank has 17 wealth management centers at its Tianjin branch ready to provide the service once it's approved, the hotline said.

Xiao Gang, chairman of BOC, said last Thursday that the bank is expected to publish details and start accepting applications from customers in Tianjin from this week. "The bank will gradually extend the service to 40 major cities," the chairman said.

But a BOC source who did not wish to be named said yesterday that risk control concerns might prevent the bank from starting the service this week.

"The regulator expects BOC to improve its risk control before it starts providing the new service. There is no clear timetable for that to happen," he said.

"The pilot program is a significant part of China's forex administration reform. The regulator needs to fix many details before it starts the business. These include determining whether applicants are qualified, which financial institutions can provide the services and how to protect investors' interests," said Zhao Xijun, a professor at Renmin University of China.

Zhang Jianguo, president of China Construction Bank, said yesterday that it had applied to regulators and expects to be involved in the new business soon.