Shanghai-Hong Kong Stock Connect live

By Charles Li, chief executive of Hong Kong Exchanges and Clearing

The Shanghai-Hong Kong StockConnect has now launched. More than a year of discussions and months ofintensive market preparations culminated in the opening gong on Monday morning,and the flow o funds directly between the Hong Kong and Shanghai markets forthe very first time.

People on both sides of theboundary are excited about the launch, and are eager to see how much isinvested northbound and southbound, how quickly quotas are used up, ifinternational investors can get used to pre-trade checking requirements, andmore.

The newspapers and media reportsare awash with predictions from market analysts. Some expect there to besubstantially more funds flowing north to Shanghai, while others predictMainland investors will flood Hong Kong's market. Some think the quota istoo small and will be used up quickly, while others might think initial tradingwill be light.  With such a wide spectrum of predictions, some people willbe right and some will be wrong.

The most important thing for usis to get this historic "train" on the tracks and to depart thestation safely.  Indeed, whether the initial trains are sold out withlarge crowds left on the platform or the train departs with some empty seatsmay not be as important.  What matters to us is that this is a long termscheme and its success will be measured in years, not days or weeks.  Theimmediate achievement is the infrastructure itself, which connects such vastlydifferent and disparate markets and systems.

I've also heard a lot of peoplespeculate over who gains more from the scheme; some think the Mainland is themajor beneficiary because its market is opening and its currency is becomingmore international.  Others say it's a gift to Hong Kong that will enhanceliquidity and bring more investors to our market.  I think both of theseperspectives miss the point – the question we should be asking is, are we better off withShanghai-Hong Kong Stock Connect or without it?  The answer is easy. Instead of counting marbles to see which side has more, we should be confidentthat we found a solution that benefits both sides.

The regulators, exchanges, andclearing houses on both sides of the boundary have worked extremely hard overthe last seven months to iron out as many kinks in the scheme as possible priorto launch day.  Just this week, the HKMA announced that the RMB20,000daily exchange limit would be lifted, and yesterday the capital gains taxissues were settled.  This should give investors some certainty andconfidence.

Still, there may be hiccups inthe early going.  Our team has worked hard and is prepared for a number ofsituations, but as with any scheme of this magnitude, there is always thepossibility of something unanticipated cropping up.  If this happens, wewill work to fix the issues as best as we can.  Shanghai-Hong Kong StockConnect will keep evolving and getting better over time, so we shouldn't be tooelated if everything is great on the first day, or too disappointed if it doesn'tmeet our expectations.  It is a long road, and we are just gettingstarted.

I want to sincerely thankeveryone in the market for your support.  It hasn't been easy coming thisfar, but we're ready to launch.  Best of luck to you all.  This is ajourney we'll be on together for a long time.