Shares in Hong Kong Exchanges and Clearing or HKEx, the company that owns the Stock Exchange of Hong Kong, jumped 5% earlier this week on speculation that Chinese policymakers will soon provide details of a proposed exchange trading link with the Shenzhen Composite, China’s second mainland bourse.

If, as expected, Chinese Premier Li Keqiang announces details of the trading program, it will be the second trading link between Hong Kong and the mainland, the first being that between Hong Kong and the Shanghai Composite which was announced 2 years ago.

“The link will open up more mainland shares in high-growth and technology companies,” said a senior economist at Mizuho Financial Global. “The Shenzhen link should have gone live last year but the stock rout that rocked Chinese stocks last summer saw it delayed. The recent rebound should give the policymakers the confidence they need to go ahead with the program.”

The creation of links between the highly-regulated and open Stock Exchange of Hong Kong and the Shanghai and Shenzhen Composites is regarded as a crucial part of China’s attempts to reform its financial markets and increase use of its currency, the yuan or renminbi.

“Greater access to Shenzhen stocks for foreigners is seen as a good thing and will almost certainly result in the inclusion of Chinese mainland shares in the global benchmark indexes,” concluded the Mizuho Financial Group economist.

Mizuho Financial Global believes that Chinese stocks are set to rebound sharply as more dovish monetary policy around the world results in more capital flowing into emerging market risk assets.

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