Brokerages in Hong Kong may be left with too many staff twiddling their thumbs if the proposed plan to connect the Hong Kong and Shenzhen stock markets is postponed until next year.
When the link-up with Shenzhen – similar to the existing one with Shanghai – was first mooted back in January, we reported that it would lead to increased workloads for brokers in Hong Kong. “Local brokers can also easily go over to Shenzhen for company visits. This could lead to a better cross-border turnover between Shenzhen and Hong Kong in comparison with that between Hong Kong and Shanghai,” Christopher Cheung Wah-fung, a Hong Kong legislator for the financial sector, told the South China Morning Post at the time.
Amid the current stock market crisis, however, brokers in Hong Kong increasingly believe that the scheme may be delayed until 2016, reports the SCMP. Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia said yesterday that it might not be the right time to be talking about mutual market access.
A delay would not be good news for the brokerages and securities houses in Hong Kong – from Haitong to Huatai – that were hiring in the first half of the year partly in anticipation of a Hong Kong-Shenzhen stock connect getting the go-ahead. The firms may have recruited too many people, too soon.
Lawmaker Cheung doesn’t think market volatility should delay the programme: “Many brokers have invested a lot of money to improve their trading system for the new cross border trading linkage. They have also hired more people to handle the extra business,” Cheung told the SCMP on Monday. “We would like to see Mr Charles Li to work with the mainland authorities to launch the connect scheme as soon as possible.”
Meanwhile:
Standard Chartered names wealth head Hsu as Singapore CEO. (Bloomberg)
HSBC appoints Andrew Maynard to head sales trading and execution services for ex-Japan Asia. (Finance Asia)
Why Goldman Sachs isn’t worried about China. (CNN)
ANZ vows to take fight to fintech start-ups. (The Australian)
BlackRock secures $400m China investment quota boost. (Channel News Asia)
China’s forex war chest takes big hit. (Wall Street Journal)