China’s offshore-stock fears trade in paranoia

Bright Smart Securities & Commodities

14/02/2023 03:22

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Pete Sweeney and Yawen Chen
       HONG KONG, Feb 14 (Reuters Breakingviews) - As travel
resumes and the yuan softens, mainland authorities may step up
curbs on citizens buying foreign shares via Hong Kong. Yet such
services are unlikely conduits for mass capital flight. And
denying domestic investors overseas hedging options is a
double-edged sword.
    Full view will be published shortly.
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    CONTEXT NEWS
     Bright Smart Securities said it will from Feb. 16 suspend
the purchase function of all securities accounts previously
opened by clients in mainland China, according to a filing with
the Hong Kong Stock Exchange dated Feb. 13.
    The Hong Kong-based brokerage said it is a pre-emptive move
until “relevant” regulations are clarified by authorities in
mainland China. 
    Guotai Junan International had suspended the opening of
accounts by mainland Chinese clients, Reuters reported on Feb.
13 citing a source.
    China’s securities watchdog, China Securities Regulatory
Commission (CSRC), said on Jan. 16 that it would implement a new
regulation from Feb. 28, which could, among other curbs,
introduce tighter scrutiny of cross-border trading in shares.
    CSRC banned online brokerages Futu Holding and UP Fintech
from soliciting new business from mainland investors on Dec. 30.
 (Column by Pete Sweeney and Yawen Chen in Hong Kong. Editing by
Antony Currie and Thomas Shum)
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