Chinese vice premier Li Keqiang unveiled a significant package of measures supporting Hong Kong’s economy, allowing more two-way investment in shares and sparking a rally in brokerage stocks on the island, wrote Jorge Vrljicak, macroeconomic analyst at Equity Research Desk.
Keqiang, the front-runner to replace Wen Jiabao as premier, said at a forum in Hong Kong that China will start an exchange-traded fund based on Hong Kong equities. He also pledged a RMB 20 billion ($3.1 billion) quota for qualified companies to invest in domestic Chinese securities and said sales of yuan bonds in the city will be expanded.
The plans relax restrictions on investment flows, bolstering the city’s role as a financial hub and are widely believed to be a further step in the internationalisation of the renminbi.
