By Enoch Yiu
South China Morning Post, Hong Kong
Friday, November 3, 2017
http://www.scmp.com/business/commodities/arti...-kilos-gold-...
Nine hundred kilos of gold, worth 300 billion yuan (US$38.45 billion)
swapped hands on Friday evening in the first cross-border trading under the
newly launched "Gold Connect," which links the gold markets of Hong
Kong and Shenzhen.
The first trades were made after a ceremony hosted by Hong Kong Chief
Executive Carrie Lam Cheng Yuet-ngor and Haywood Cheung Tak-hay, president of
the Chinese Gold and Silver Exchange Society.
Under the scheme, mainland investors can trade yuan-denominated 1-kilogram
gold bars in Hong Kong through one of the city's 70 exchange members in
Qianhai, the special economic zone in Shenzhen designed to facilitate the
development of financial services that complement Hong Kong.
Investors can opt for settlement in cash or physical gold delivery.
The Shenzhen-Hong Kong Gold Connect is the city's second such trading
scheme after a linkup between Hong Kong and the Shanghai market in 2015. The
new link has 70 Hong Kong companies taking part, compared with 30 in the
Shanghai-Hong Kong Gold Connect.
"The Chinese Gold & Silver Exchange Society has a 108-year
history and has been promoting offshore yuan gold trading in recent
years," said Carrie Lam Cheng Yuet-ngor. "The new Gold Connect to
start tonight, as well as the gold vault in Qianhai, will help gold traders
save time and money settling gold trades. This will benefit both Hong Kong
and mainland gold traders and investors."
Lam added that the new scheme would create closer ties between Hong Kong
and Qianhai and credited the local gold bourse's efforts to tie up with gold
exchanges in Dubai, Singapore, and Myanmar as well.
The proposed gold vault will operate from April and be able to store 1,500
tonnes of gold, allowing mainlanders who trade the metal in Hong Kong via
Qianhai to gain physical delivery.
Haywood Cheung said: "The new connect will boost the
internationalisation of the yuan. The Shanghai Connect has already benefited
international investors to trade gold in the mainland. The new Shenzhen leg
will make it easier for 2,000 jewellery makers to trade gold in Hong
Kong."
While the Shanghai link allows Hong Kong investors only to trade on the
mainland city's gold exchanges, the Shenzhen link now allows mainlanders to
trade in Hong Kong.
This is different from the two Stock Connect schemes that linked up share
markets in Hong Kong and Shanghai in 2014 and Shenzhen last year. Both allow
northbound and southbound trading.
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