– This is the script of CNBC's news report for China's CCTV on December 5, Monday.
Welcome to CNBC Business Daily, I'm Qian Chen.
A long-awaited stock trading link between the Hong Kong and Shenzhen exchanges is now officially live.
The connect is seen as a step further opening up China's capital markets to global investors and giving them access to some of its fastest-growing companies.
The launch will extend an existing trading link between Hong Kong and Shanghai, allowing foreign investors to trade Shenzhen stocks, one of the world's busiest and most tech-focused exchanges, from Hong Kong.
Domestic Chinese investors, meanwhile, will be able to trade an expanded range of Hong Kong stocks via the Shenzhen and Shanghai exchanges.
With more than 1,800 listed companies that have a combined market capitalization of $3.3 trillion, the Shenzhen stock market is viewed by analysts and fund managers as a major long-term investment opportunity.
[FRASER HOWIE, Independent Analyst] "I think you know, the great thing about Shenzhen is it got all the small companies - you got this Chinese SME board in Shenzhen, so you are looking at phrmacuticals, you are looking at the media companies, you are looking at these whole small private companies, so in that sense, it certainly opens the different range of investments, from waht you currently have in the Shanghai connect."
The extension of the link to Shenzhen will also see an aggregate quota cap on investment in both directions across the border scrapped, and a new raft of smaller Hong Kong stocks available to domestic Chinese investors.
[KEVIN LEUNG, Haitong International Securities Group Director, Global Investment Strategy] "On the Hong Kong side, where valuation is a little bit cheaper, and those will be where they are looking for. We don't think it will actually go into penny stocks or things like that, but then stocks with fundementals, you look at Hengseng small cap composite index, those will be where the interet will be coming in."
The new link is also expected to lead to dramatic inflows into Hong Kong, according to analysts.
As expectations are high for a December rate hike from the FOMC, Chinese domestic investors are seeking ways to diversify their assets out of a weakening yuan.
CNBC Qian Chen, reporting from Singapore.