The Zhitong Finance App learned that on August 18, the Hong Kong Stock Exchange welcomed the China Financial Supervisory Authority's announcement to actively support mainland insurance funds to participate in financial market connectivity between the Mainland and Hong Kong, and support mainland insurance institutions to invest in Hong Kong's exchange-traded funds (ETFs) through the Shanghai-Shenzhen-Hong Kong Stock Connect.
HKEx Group Chief Executive Chen Yiting said, “We sincerely thank the China Financial Supervisory Authority for its strong support for the connectivity mechanism and the Hong Kong financial market. This new initiative will not only facilitate the cross-border diversified asset allocation of mainland insurance institutions, but will also significantly enhance the liquidity of the Hong Kong ETF market, further enhance the appeal of the Shanghai-Shenzhen-Hong Kong Stock Connect, and consolidate Hong Kong's position as an international financial center. We very much welcome mainland insurance institutions to make full use of the rich and diverse products and risk management tools of Hong Kong's international capital market to optimize asset allocation structures and enhance return on investment.”
Since ETFs were included in the Shanghai-Shenzhen-Hong Kong Stock Connect in 2022, both southbound and northbound ETF transactions have become increasingly active. In January-July of this year, the average daily turnover of the Shanghai and Shenzhen-Hong Kong Stock Connect Southbound ETFs and Northbound ETFs was approximately HK$5.8 billion and RMB 5.1 billion respectively, up 61% and 86%, respectively. Active ETF transactions under the Hong Kong Stock Connect have also led to the prosperity of the Hong Kong ETF market. From January to July of this year, the average daily turnover of the Hong Kong ETF market reached HK$40.6 billion, an increase of 22% over the previous year.