The first yuan-denominated share to list on the Hong Kong stock exchange is laying the groundwork for a "seismic change" when China allows its citizens to invest abroad more freely, the exchange's head said.
香港交易所(Hong Kong Exchanges & Clearing Ltd.)行政总裁李小加(Charles Li)说，香港交易所上市的首只人民币计价股票将为一场“巨大变化”奠定基础，那就是中国允许内地公民更自由地投资海外。
In an exclusive interview with The Wall Street Journal, Charles Li, chief executive of Hong Kong Exchanges & Clearing Ltd. (0388.HK), said exchange officials are preparing for much greater outbound investment from China that would drive demand for yuan-linked products in Hong Kong. He also outlined his ambitions to build up a derivatives business that would act as a bridge between Chinese customers and international commodity markets.
Thomas Lee for the Wall Street Journal李小加(Charles Li)李小加在接受《华尔街日报》独家专访时说，香港交易所官员正准备应对中国更大规模的对外投资，投资将推动香港人民币相关产品的需求。他还简要介绍了自己将构建一个衍生品业务、在中国内地客户与国际大宗商品市场之间架设起桥梁的雄心壮志。
The comments from Mr. Li, a 50-year-old native of Beijing and former banker with J.P. Morgan Chase & Co. (JPM) who once worked on oil rigs in northwest China, reflect his intense focus on connecting the Hong Kong exchange with the largely untapped market of mainland Chinese investors. Since taking over as head of HKEx in January 2010, he has made a particular priority out of positioning the exchange to benefit from China's effort to liberalize its currency, also known as the renminbi.
李小加的话反映出他十分关注将香港交易所与基本尚未开发的中国内地投资者市场连接起来。李小加现年50岁，是北京人，曾是摩根大通(J.P. Morgan Chase & Co.)银行家，从事中国西北部油井业务。自2010年1月担任香港交易所行政总裁以来，他尤其着重于把香港交易所打造成能够从人民币国际化中获益的交易所。
One result is Hui Xian Real Estate Investment Trust (87001.HK), the first yuan-denominated stock issued outside mainland China, which begins trading on the Hong Kong exchange this Friday. The offering, backed by properties in Beijing owned by billionaire Li Ka-shing, has raised CNY10.48 billion (US$1.61 billion).
成果之一是汇贤房地产投资信托基金(Hui Xian Real Estate Investment Trust, 简称：汇贤REIT)，这是中国内地以外上市的首只人民币计价股票，本周五将在香港交易所上市交易。此次股票发行依托的是亿万富翁李嘉诚(Li Ka-shing)在北京的房地产，已经筹集了人民币104.8亿元（合16.1亿美元）。
Expectations of yuan appreciation have pushed the amount of renminbi held in Hong Kong bank accounts up more than fivefold since the beginning of last year to CNY407.7 billion. Bankers expect renminbi bond issuance in Hong Kong, which hit CNY36 billion in 2010, to more than double this year. After Hui Xian REIT, HKEx's Mr. Li hopes to see several more yuan stocks list in Hong Kong later this year.
But Mr. Li's ambitions for those shares aren't geared toward Hong Kong investors: They are a play on "a seismic change that is taking place in our market over time," he said, as China allows investors to take their money abroad.
"That big gate, that big dam' holding back China's massive investor base is coming down," Mr. Li said, "adding that the result will bring more changes to the global capital market today than anything else."
Mr. Li believes that the key for HKEx to capture demand from mainland Chinese investors is to have renminbi products that are "currency-neutral." That is, you remove an element of exchange rate risk that bankers say depresses demand for overseas shares from Chinese investors through an existing quota system.
As the availability of renminbi products grow, he said, "we're working with the [central] government", "we're lobbying authorities, to gradually open and allow greater outbound investment through new quotas aimed at high-net-worth individuals", he said.
After that, he believes Hong Kong could aim for dual listings of yuan-denominated shares in Shanghai and Hong Kong. Eventually, those shares might be freely tradable by investors in both markets.
"This is our pipe dream," he said, adding that the exchange has discussed these ideas "with a lot of other people."
Dreams of outbound flows of Chinese capital have long had a special appeal in Hong Kong. In August of 2007, an unusual proposal to allow domestic Chinese investors to bypass existing barriers and buy Hong Kong stocks directly sent the city's benchmark index soaring nearly 50% in 10 weeks. The plan was later quashed, and stocks fell back to earth.
In the interview, Mr. Li later spoke of his aim to make HKEx a bigger player in commodity and financial derivatives that tap demand from China, already a powerhouse in global markets for energy, metals and agricultural products.
He identified interest rate swaps as a big potential market, as use of China's currency becomes more widespread.
As part of these efforts, HKEx is talking with China's three commodity exchanges as well as with its financial futures exchange about ways to cooperate.
Not all changes at HKEx under Mr. Li have been universally welcomed. Earlier this year, HKEx began allowing mainland Chinese companies to use Chinese accounting standards and auditors. Critics say the move, aimed at reducing auditing costs for issuers, undermines protections for investors. Exchange officials have defended the move, arguing that China has raised its accounting standards and auditors will be subject to tight scrutiny by China's Ministry of Finance.