The start of the Shanghai-Hong Kong Stock Connect on Monday represents a major step forward for China's capital markets, allowing for the first time cross-border trading via the Hong Kong Exchange and Shanghai Exchange Mutual Market Access link.
Starting Monday, overseas investors were able to invest in Shanghai-listed stocks via the Hong Kong Stock Exchange and Chinese mainland investors could buy stocks listed in Hong Kong via the Shanghai Stock Exchange.
Over the past week, the markets have seen equity rallies in both cities, because Stock Connect will give international fund managers unprecedented access to China's $4.2 trillion stock market and allow a combined $3.8 billion of daily cross-border trading.
Stock Connect means more opportunities for Bloomberg's institutional clients worldwide to invest directly in the world's fastest-growing economy via Hong Kong as a gateway.
It signifies the next stage in the opening-up of China's capital markets and will accelerate the internationalization of the yuan.
Over the past months, Bloomberg has worked closely with the exchanges, looked at the unique market specifications, built infrastructure, introduced customized technology solutions and new market data structures to ensure seamless workflow and execution for our clients participating in the Stock Connect program.
The information and data we provide further enhance market transparency. It was important that from day one, the Bloomberg Professional service would be ready to support our clients in a trading workflow they were familiar with.
Through trade connectivity, market data, analytics and news about Stock Connect, Bloomberg is ensuring global investors can monitor the markets and make informed decisions based on fast and accurate information.
Bloomberg Professional service subscribers can participate in the Stock Connect and trade via our execution management system. Securities eligible for MMA will have the Exchange Codes H1 for Southbound and C1 for Northbound trading.
We can capture trading data for pre-and post-trade analytics for both the buy and sell sides. Clients can also access China macroeconomic updates, sector and company analysis and undertake real-time monitoring of applicable stocks and investment flows.
The investment community is ready for the Stock Connect and so are we. Our work around the new trading link further extends Bloomberg's role in engaging China with the world, leveraging our leadership in QFII and QDII order flows.
Sound financial infrastructure will be critical to the future success of the MMA program, and our support toward the further development of China's capital markets continues.
The author is head of Bloomberg China
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