Shenzhen to integrate capital markets with Hong Kong

An Exchange Traded Fund is a type of fund that tracks a stock index, and can be traded on stock exchanges just like shares. Now, South China's Shenzhen Stock Exchange is more closely cooperating with the Hong Kong Stock Exchange on this kind of fund. The two exchanges will list ETF's with each other. Through this, investors in Hong Kong will be able to buy funds that track the movement in Shenzhen stock market.

The Shenzhen Stock Exchange says it is waiting for official approval of its ETF in Hong Kong, which will track the main stock index on Shenzhen market.

Lu Zhiming, Chief Executive of Shenzhen Securities Information Company, said, "The Hong Kong branch of CITIC Securities has signed agreements with us to launch an ETF tracking the Shenzhen Component Index. Another ETF product tracking the Shenzhen 100 Index will be handled by a branch of China International Capital Corporation. It is waiting for approval from Hong Kong's securities regulator."

At the same time, the Shenzhen exchange is also making preparations to launch an ETF that tracks the Hang Seng Index in Hong Kong. Once it's launched, mainland investors will be able to use the yuan to buy funds that track Hong Kong's stock index. In August, Taiwan and Hong Kong stock exchanges listed ETF's with each other. Market insiders say the mainland is likely to have the same cooperation with Taiwan, and that will provide more investment channels for mainland investors.