Shanghai-London stock exchange tie-up unlikely to happen this year

People walk through the lobby of the London Stock Exchange in London, Britain. REUTERS/Suzanne Plunkett

A tie-up between London and Shanghai to allow Chinese firms to raise money on the UK stock market and British firms to sell shares in China is facing a long delay and is not likely to happen this year, sources close to the matter said.

The ShanghaiLondon Stock Connect project started in 2015 and was embraced by the London Stock Exchange as one that would give Britain a lead in tapping Chinese investors who are currently not able to invest overseas. It would also allow companies on the Shanghai Stock Exchange (SSE) to launch secondary offerings in London.

Chinese companies listed domestically cannot have a secondary listing abroad at the moment, with the exception of Hong Kong, and investors cannot use currencies such as euros or pounds.

The project will be important for London post Brexit and could also help the London market combat a sharp fall in new listings across Europe.

But sources say interest in the project in China has lost momentum, possibly because of difficulties introducing necessary changes to money market rules, as well as the delay to Brexit and the ongoing trade dispute with the United States.

The sources said what looked like a short delay to the launch of the London Connect could now be indefinite.

LSE and SSE officials say there is progress.

“Various work around the ShanghaiLondon Connect is proceeding normally,” the SSE said in an emailed statement.

“The timing of launch will be decided by the preparatory conditions of the issuers on both sides, and the market. There’s no concrete timetable for the launch.”

Charlie Walker, LSE head of Equity Primary Markets, said that the project “is now in the final stages prior to launch. We are just waiting for one final set of foreign exchange rules to come out, and are hopeful that it will launch this year.”

The delay comes as the uncertainty caused by Brexit remains unresolved and as growing trade tensions between the United States and China continue to rattle investors.

A launch ceremony for the project, scheduled for last December, was called off. A Chinese media report said at the time that this delay was linked to Britain’s parliamentary vote on the Brexit deal, which was seen as creating market turbulence.

Brexit has now been delayed until the end of October and the British government is still working to reach an exit agreement.

The concept of a tie-up between Shanghai and London is the latest in a series of efforts by China to gradually bring its stock markets into the world trading system.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.