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London Stock Exchange (fortune.com)

Beijing suspends Stock Connect

London Stock Exchange (fortune.com)

Reuters news agency reports that China has temporarily blocked planned cross-border listings between the Shanghai and London stock exchanges.

Beijing, China (Photo: South China Morning Post)

Now the future of a scheme which would have helped Chinese firms to expand their investor base and give mainland investors access to UK-listed companies appears uncertain.

Sources told Reuters that political disagreements were behind the suspension citing Britain’s stance over the Hong Kong protests.

Hong Kong has been aflame with protests with China blaming the unrest on interference by foreign governments including the United States and Britain. Protestors are opposing tight controls by Beijing.

London’s position on the Hong Kong protests is said to be the reason behind Bejing’s withdrawal. (Photo: london.gov.uk)

No official responses were obtained by Reuters to the action of suspension of the cross-border listing scheme.

 The scheme, Stock Connect, started in 2019 and saw Huatai Securities as the first Chinese company to list in May 2019.

Next was alternative energy operator SDIC Power which announced plans to list in December with global depository receipts (GDRs) in London representing 10 per cent of its share capital.

Huatai Securities was the first Chinese company to list on Stock Connect in May 2019. (Photo:cgtn.com)

However, the deal was postponed, with SDIC Power citing market conditions. Later it was suggested that the suspension resulted from the suspension of Stock Connect.

Analysts told Reuters that the challenge is bad timing for the UK, which wants to improve connections with non-European Union countries as it prepares to leave the bloc.

The analysts said that the London exchange is set for its worse year in listings in 2020 as data shows that political volatility and concerns over Britain’s EU exit is affecting stock market fundraisings.