RisCura, a global investment advisory and financial analytics firm predominantly focused on emerging markets, has welcomed the launch of the Shanghai-London Stock Connect scheme, saying it will further open the Chinese capital markets and create investment opportunities for UK investors.
The scheme, which launched yesterday, is set to encourage cross border trading between the two countries and provide mutual access to each other’s capital markets. Shanghai-listed companies can now raise new capital on the London Stock Exchange, while UK-listed companies can offer shares to Chinese investors. There is optimism surrounding the link with initial quotas of over £28 billion set for both sides of the scheme and the first Chinese based firm, Huatai Securities Co Ltd, having begun trading yesterday.
Lars Hagenbuch, Consultant at RisCura, commented: “Investing in Chinese markets has long been an attractive option for sophisticated foreign investors looking to diversify their portfolio. This initiative provides further options by opening the Chinese markets and emphasising its position as an outward global actor. China is currently benefiting from one of the largest tax cuts in history and with strong domestic consumption trends, it creates an attractive picture in terms of potential returns.
“This two-way access will now allow British firms to broaden their investor base by selling existing shares in Shanghai, in turn creating a more open and transparent dialogue between these two leading economies. China is simply too large an opportunity to ignore, it will be interesting to see the who has the foresight to take advantage of the opportunity early on, and how soon others will follow.”