HKEX's Yu Xueqin: The future development of connectivity will shift from considering "access" to "usage," focusing on assisting long-term capital allocation.

At the Hong Kong Stock Exchange (00388) China Opportunities Forum held in Shanghai, Market Director Yu Xueqin stated that the connectivity mechanism has successfully completed its task of "linking" the mainland and Hong Kong markets over the past decade. He anticipates that the focus of development in the next three to five years will shift from merely considering "connectivity" to "utilization," aiming to assist long-term investors in optimizing asset allocation and keeping funds in the Chinese market. Yu Xueqin pointed out that currently, Hong Kong's new stock market has attracted various participants, including long-term funds from Europe and the U.S., sovereign funds from the Middle East, and southbound capital. The approval for mainland insurance funds to invest in ETFs (Exchange-Traded Funds) will further enhance interaction between the two markets. Representatives from the Shanghai and Shenzhen stock exchanges also announced subsequent deepening initiatives. Zhang Bin, Director of the International Cooperation Department of the Shanghai Stock Exchange, stated that efforts will continue to guide long-term funds into the market, improve the quality of A-share-listed companies, and identify more quality targets for inclusion in the Stock Connect, while also promoting companies to strengthen dividends and buybacks. Wang Shenghui, Director of the Member Management Department of the Shenzhen Stock Exchange, revealed that preparations are actively underway to include REITs (Real Estate Investment Trusts) and RMB stock trading counters into the connectivity mechanism, further enriching cross-border investment options.