Connecting China to the World

China’s economic growth has been a steady, gradual process, generating significant economic benefits for both China and the UK. The past three decades of policy and economic reforms have enabled China’s rapid ascension to the global stage. Sitting at the heart of the global financial community, London Stock Exchange Group are delighted to have supported this.

The latest vehicle for that co-operation is the Shanghai-London Stock Connect, which in June 2019 welcomed Huatai Securities, the Chinese technology-enabled securities group, as the first issuer using the new collaboration. Huatai raised $1.7bn through the sale of Global Depositary Receipts (GDRs) to international investors and was admitted to trading on the Shanghai Segment of the Main Market of London Stock Exchange.

Fixed Income: Aiding the Internationalisation of the Renminbi

As one of the world’s premier listing venues for bonds, London Stock Exchange offers Chinese issuers access to a broad base of international investors, and has established itself as the leading centre outside of Greater China for RMB bonds. 117 Dim Sum bonds have listed in London, raising over RMB 39bn for Chinese and international issuers.

London was chosen as the listing venue of choice for the Chinese Government’s maiden offshore RMB bond in June 2016, which demonstrated enormous investor demand for Chinese debt in London.

London has hosted many landmark issuances from Greater China, including the largest ever green bond listing on London Stock Exchange, the first sustainability bond on London Stock Exchange’s International Securities Market, and the first international green bond and green covered bond from China.

The Global Equity Segment: Trading China in London

Launched on 15 October 2019, the Global Equity Segment (GES) is the latest innovation from London Stock Exchange. With GES, investors are able to trade global securities, including certain US blue chips and US-listed Chinese ADRs such as Alibaba, Baidu and Futu, during London hours.

Using the well-established CREST Depository Interest (CDI) workflow allows investors to trade and settle international securities in London quickly, cheaply and efficiently.

Moving CDIs efficiently between markets allows for cross-border execution and settlement within a t+2 settlement cycle. Investors can buy securities in London and sell in New York on the same day during regular trading hours.

Index Inclusion

LSEGs world-leading index and analytics business, FTSE Russell, has a strong track record in developing Chinese market indexes; FTSE Russell China benchmarks have become widely recognised by investors and issuers globally as a leading measure of the Chinese equity market.

Since 24 June 2019, A-shares have been included in FTSE Russell’s global equity benchmarks; a reflection of China’s remarkable ascent and the great progress that has been made in Chinese equity capital markets.

This was a gradual, multi-step project involving comprehensive input and feedback from a wide range of market participants, including the global investor community. The first phase of inclusion could equate to $10 billion net passive inflows following completion.