Post-Brexit London Takes Step Forward With Shanghai Stock Linkby
London Stock Exchange Group Plc took a small step forward with the Shanghai Stock Exchange as they develop common operations between the markets.
The companies agreed to “develop rules and implementation arrangements,” according to a joint announcement Thursday. The statement suggests the U.K. is looking to deepen ties with other markets at a time when its access to Europe’s single market is in jeopardy. The paper was light on details about connecting the markets, which faces obstacles in part because the operations are in different time zones.
“For the U.K., the initiative will help to cement London’s position as the leading financial center and open up new sources of investment,” U.K. Chancellor of the Exchequer Philip Hammond said in the statement. “The initiative also marks an important milestone for China as it continues to open up its markets and liberalize its economy.”
The U.K. stock link was originally announced by Hammond’s predecessor, George Osborne. China agreed to open a formal trading link between Shanghai and Hong Kong -- dubbed Stock Connect -- in November 2014. The aim of such tie-ups is to build infrastructure that gives investors better access to China’s booming equity market.
The link between London and Shanghai is part of a broader plan between the two nations, which sets out how China and the U.K. will cooperate and boost access in areas including capital markets, asset management, insurance and pensions, and fintech.