Stocks News
- Govt. to be cautious with HK stock plan
Date: 26-Nov-2007 Sources: (Xinhua Online)
THE government will proceed prudently with plans for a landmark program permitting mainland residents to invest directly in Hong Kong stocks for the first time, Premier Wen Jiabao said in remarks reported Saturday.
Wen told visiting Hong Kong Chief Executive Donald Tsang on Friday that the Central Government would move forward 'cautiously and pragmatically?with the initiative to ensure the financial stability of Hong Kong and the mainland, the China Daily said.
The State Administration of Foreign Exchange (SAFE), the currency regulator, announced plans for the direct investment program Aug. 20.
Shares in Hong Kong promptly surged in anticipation of a wall of mainland money, but it quickly became clear that SAFE had not secured the final approval of other government ministries.
Wen confirmed Nov. 3 that the program, dubbed the 'through train? was on hold while the government examined the potential risks.
Policymakers are gradually relaxing China's capital controls to ease upward pressure on the yuan. But they are concerned that mainland investors would be out of their depth in Hong Kong and could lose heavily. Others worry that too much cash could flow out, undermining support for the domestic bourse.
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