Hong Kong mulls new moves to spur yuan usage in stock trading, business financing
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The government plans to change a law next year to give investors the option to pay stamp duties on stock trades in yuan in addition to the Hong Kong dollar, Financial Secretary Paul Chan Mo-po said in his budget address on Wednesday. Plans are also afoot to add Hong Kong-listed yuan-based shares to the Stock Connect scheme, he added, without specifying the launch date.
Both measures would sidestep currency-exchange risks, which would especially benefit mainland-based investors, analysts said.
'It is very logical for investors to want to settle everything in the same currency,' said Tommy Ong, managing director of T.O. & Associates Consultancy. 'The appetite among mainland investors in these stocks is huge' and is likely to spur their trading volume, he added.
Financial Secretary Paul Chan Mo-po briefs the local media after delivering his budget on February 26. Photo: Elson Li
In June 2023, Hong Kong allowed 24 of the biggest companies on its stock exchange – including the Post owner Alibaba Group Holding, AIA Group, Tencent Holdings – to issue yuan-denominated shares on top of the local dollar. Adding them to the Stock Connect would widen access to mainland investors and boost trading turnover, analysts said.
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