A planned stock connect between the Shanghai Stock Exchange and the London Stock Exchange may be delayed as Chinese regulators have said that they need time to study the new legal framework in London if the UK leaves the EU, FTSE Global Markets has reported.29 Jul 2016
The China Securities Regulatory Commission is to assess the impact of Brexit on the stock link, FTSE Global Markets said.
The Hong Kong Economic Journal reported in April that the Shanghai-London stock link would go live in September before the G20 meeting in Hangzhou, with global depositary receipts initially in use to gauge market reaction. A GDR is a bank certificate issued in more than one country for shares in a foreign company.
The stock connect was proposed last year, as the UK and China called for feasibility study on a free trade agreement between China and the EU.
A source from CSOP fund managers told the FTSE Global Markets that: "Brexit is expected be marginally beneficial to China. The UK may have less bargaining power in international affairs, and it will choose to strengthen its relations with China and to enhance London’s position as the offshore RMB centre in Europe. Therefore, investors expect more cooperation between the two countries."