London-Shanghai Stock Connect launched

Companies listed in the United Kingdom became the first foreign firms to be able to sell shares on the Chinese mainland, starting on Monday, with the official launch of the long-awaited London-Shanghai Stock Connect project.

The project will allow firms listed in Britain and on the Chinese mainland to raise funds on each other’s stock market.

"Stock Connect is a groundbreaking initiative, which will deepen our global connectivity as we look outwards to new opportunities in Asia," Chancellor of the Exchequer Philip Hammond said at the launch.

"London is a global financial center like no other, and today's launch is a strong vote of confidence in the UK market," the British finance minister added.

Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said at the Lujiazui Forum in Shanghai last week that "the further development of the London-Shanghai Stock Connect scheme can allow foreign companies to raise funds on the Chinese market".

Huatai Securities Co Ltd, one of the largest brokerages in China, efficiently launched on the London market on the same day, becoming the first company to trade via the London-Shanghai Stock Connect project.

Huatai's US$1.69-billion GDR listing on the Connect segment of the London Stock Exchange marked the largest UK listing since 2016 and the largest GDR offering in the UK since 2012, according to JP Morgan which acted as joint global coordinator, joint bookrunner and sole stabilization agent on this listing.

A global depository receipt (GDR) is a bank certificate issued in more than one country for shares in a foreign company.

The GDR listing offers international investors access to the highly liquid domestic Chinese A-share market for the first time, with a fungible instrument traded on an international exchange, JP Morgan said.