Hong Kong Plans Yuan Repos to Meet Demand for Shanghai’s Stocks
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Hong Kong is setting up a 10 billion yuan ($1.6 billion) intra-day repurchase facility and seeking to relax a cap on yuan purchases by the city’s residents before local investors gain access to Shanghai’s stock market.
Hong Kong Monetary Authority will also announce in coming weeks a list of five to six banks that will act as “primary liquidity providers” for the yuan and have their own access to intra-day and overnight repos, Chief Executive Norman Chan said at a conference in Hong Kong. The Hong Kong-Shanghai Stock Connect program, which is scheduled to start in October, will enable 13 billion yuan to flow north into mainland equities each day and 10.5 billion yuan to head south.