(Yicai Global) June 19 -- The Hong Kong Stock Exchange launched its Hong Kong dollar–Chinese yuan dual-counter model today, allowing investors to trade in both Hong Kong dollars and the redback in the biggest yuan-denominated stock offering in an offshore market.

Twenty-four companies, including tech giants Tencent Holding, Alibaba Group Holdings and JD.com, have joined the dual-counter scheme, and they account for around 40 percent of daily trading volume on the Hong Kong bourse, the bourse said. Nine firms are participating as market makers, or third-party brokers.

“The internationalization of the yuan will be one of the defining characteristics of global markets in the next decade, and at Hong Kong Exchanges and Clearing we are delighted to today be taking another step forward in building a liquid and accessible yuan ecosystem,” said Nicolas Aguzin, chief executive of the stock exchange’s operator.

“The launch of the dual-counter initiative, which the bourse first announced in December last year, is the latest in our broad suite of yuan products, providing investors with more choice and companies with another channel to tap the Hong Kong offshore yuan pool,” Aguzin added.

The dual-counter model is the first time that such a big yuan-denominated stock transaction has been conducted in offshore markets, Guosen Securities said in a recent research report. It will help expand the channels of two-way cross-border capital flow of the yuan, enhance the liquidity of Hong Kong’s offshore yuan market, and consolidate Hong Kong’s position as the center of the offshore yuan market.

“Next, we will connect the yuan counter to the Shenzhen-Hong Kong Stock Connect and Shanghai-Hong Kong Stock Connect mechanisms, to allow investors on the mainland to directly buy Hong Kong stocks in yuan,” Christopher Hui, the head of Hong Kong’s Financial Services and Treasury Bureau, said on June 9.

Editor: Kim Taylor