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HK & SHANGHAI SHARES FALL AFTER DELAYED CONNECTION

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HK & SHANGHAI SHARES FALL AFTER DELAYED CONNECTION

Oct 27 2014, 9.15am GMT

Stock.com

The proposed connection between Shanghai and Hong Kong stock exchanges is delayed with no immediate future timetable.

This has caused a fall in the Hang Seng from 23.302 down to 23.009 early Monday morning, rising back to 23,140 later. There was also as much as a 5 percent drop in shares in the Hong Kong Exchanges & Clearings, taking this to a six month low. 

The Hong Kong-Shanghai Stock Connect programme was supposed to start at the end of October but relevant approval has not been forthcoming for HKEx. The purpose of the operation is to open up the mainly closed $4 trillion Chinese market to foreign investors, and give Chinese investors the opportunity to access the Hong Kong markets directly.

Chinese premier Li Keqiang revealed plans for the connection in April this year, with both the China Securities Regulatory Commission and the Hong Kong Securities and Futures Commission, signing a memorandum of understanding for tough regulation and oversight on the market venture earlier this month. Though ready on a technical level, there may be problems arising from the two different legal and tax regimes. 

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