Hong Kong budget: Inflows in doubt under RMB-denominated Stock Connect

Hong Kong authorities have proposed allowing Renminbi-denominated stocks to trade via the city’s southbound Stock Connect platform, in a tactical decision to encourage more inflows from the Chinese mainland. However, whether this will actually happen is still in doubt, as many mainland investors who buy Hong Kong equities tend to add offshore positions in Hong Kong dollars. THE GRAND PLAN Hong Kong’s Financial Secretary Paul Chan Mo-po announced on February 23 in the city’s 20…